US Senator Says Lack of Regulatory Clarity is Driving Crypto Outside the US

Senator Bill Hagerty (R-Tenn.) has said that the lack of regulatory clarity in the United States is creating an unfavorable environment, driving crypto companies outside the country. 

“It is a terrible environment. For those companies who are trying to invest and expand, it’s forcing them to look overseas to more favorable regulatory environments,” Hagerty said while addressing an audience at the Cato Institute, a libertarian-leaning think tank.

The Senator also highlighted the need for comprehensive cryptocurrency legislation in the US.

The call for clearer crypto regulations comes as regulatory agencies such as the Securities and Exchange Commission (SEC) continue to take enforcement actions, much to the dismay of the crypto industry. 

Back in June, the commission sued both Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest US-based cryptocurrency exchange, for operating as unregistered exchanges and offering unregistered securities, among other charges.  

Sen. Hagerty Emerges as a Crypto Supporter

Hagerty has emerged as a prominent voice in the Senate regarding crypto matters. 

While he hasn’t introduced any bills this year, he has written public letters to key officials advocating for clearer digital asset regulations.

During the Cato event, Hagerty emphasized the need for an incremental approach to crypto legislation, pointing out a concise two-page stablecoin bill he introduced in 2021 as an example. 

“I admire my colleagues, but it seems that they value the legislation based on how many pages are in it.”

Hagerty criticized the SEC’s “regulation by enforcement” approach and called for more oversight hearings involving SEC Chair Gary Gensler, rather than relying solely on the agency’s actions. 

He expressed confusion over Gensler’s staunch criticism of the crypto industry, considering his previous experience teaching a blockchain course at MIT. 

Hagerty also voiced concerns about central bank digital currencies (CBDCs), warning that their widespread adoption could bring the US closer to China in terms of surveillance of economic behavior. 

He specifically mentioned Saule Omarova, President Joe Biden’s nominee to the Office of the Comptroller of the Currency, who advocated for a government-led digital currency following a banking crisis in March.

Crypto Veteran Suggests Crypto Developers to Avoid the US 

The comments from Hagerty come as numerous crypto veterans have encouraged crypto builders to focus on experimenting in other markets and return to the US when the time is right.

Last month, Antonio Juliano, founder of the decentralized exchange dYdX, suggested that crypto developers need to forget about serving customers in the US for the next five to 10 years due to a hostile regulatory environment. 

“It’s not really worth the hassle / compromises. Most of the market is overseas anyways. Innovate there, find PMF, then come back with more leverage,” he wrote in an X thread. 

It is worth noting that the regulatory ambiguity in the US has forced crypto companies to explore other markets such as the UK and Brazil, where regulations are clearer.

Coinbase is already expanding its global virtual currency footprint aggressively with operations in Germany, Ireland, Italy, and the Netherlands. 

The company is also considering a potential move to the UK and Dubai for a friendlier regulatory environment. 

Likewise, Binance is doing what it can to be regulated in the UK despite a ban on the company by the UK regulator last year.