Cardano Founder Warns US Cryptocurrency Approach May Drive Away Major Players

Losing Ground

The United States' approach to cryptocurrencies could have detrimental consequences, potentially pushing away major players in the industry, according to Cardano founder Charles Hoskinson. During the recent Abu Dhabi Finance Week, Hoskinson criticized US regulators for alienating the cryptocurrency industry and for their lack of clarity.

Decentralization Debate

Hoskinson specifically pointed out the perceived inconsistency in the US Securities and Exchange Commission's (SEC) application of decentralization standards. He highlighted the case of Cardano (ADA), which did not conduct an initial coin offering (ICO) and sold ADA vouchers in Japan with no US involvement. Hoskinson questioned the jurisdiction of US regulators in this case, referencing a recent court ruling on Ripple.

Double Standards

Hoskinson also raised concerns about Ethereum and Bitcoin being labeled as non-securities, despite Ethereum conducting an ICO without mandatory Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. He criticized the ambiguity in US regulations, stating that it seemed like a "monster of the week" approach.

Registration Challenges

In light of the recent SEC complaint against crypto exchange Kraken, Hoskinson highlighted the vagueness of the registration process with the SEC. He questioned how issuers can understand who holds the cryptocurrency in a decentralized protocol and how they can perform KYC and AML checks on every individual. Hoskinson emphasized the need for clear and unambiguous policies from regulators.

Call for Collaboration

Hoskinson called for an open door policy between the crypto industry, regulators, and legislators to address issues and update laws to reflect emerging technologies. He believes that a law will eventually be passed to remove ambiguity and that the collaboration between the Commodities Futures Trading Commission (CFTC) and the SEC will help resolve these issues.

Despite ongoing litigation, Hoskinson remains optimistic that regulatory regimes and policies will evolve over time.