Bitfury CEO and former interim currency controller Brian Brooks has hinted that the regulatory environment in the United States could propel many crypto companies out of the country, and has already hampered companies trying to offer a variety of financial products.
Speaking at a hearing Wednesday on Digital assets and the future of finance With the House Financial Services Committee, Congressman Ted Budd said he feared that the current policy of regulation by application in the US could “force the creation of the next generation of financial technology outside of our country.” . Speaking on behalf of Bitfury, Brooks said:
“There are some products that are legal in other countries and they just aren’t here,” Brooks said. “One of the things that makes cryptocurrencies risky is that consumers may not understand the difference between one token and another, so they may want to diversify […] we don’t allow that in the United States; We allow it in Canada, we allow it in Germany, Singapore, Portugal and various other places. ”He added:
“If you are a developer of [exchange-traded funds], there is no fuzzy line, it’s very clear: you can’t do that here, so you have to go abroad. ”
Brooks placed the lack of exchange-traded funds, or ETFs, in the US with the Securities and Exchange Commission. Although the regulator has recently approved ETFs with exposure to Bitcoin (BTC) futures from investment managers ProShares and Valkyrie, it has not yet given the green light to BTC or other crypto ETFs. In contrast, many US companies with operations in Canada have successfully applied to local regulators for ETFs with direct exposure to cryptocurrencies.
Related: More than 40 digital currency ETFs await US regulatory approval.
However, the former head of the OCC suggested that the lack of approval of crypto investment products was due more to the United States’ “fragmented approach to regulation”, given the number of bodies that oversee banks, finance and now digital assets. Brooks proposed a solution in which traditional financial institutions would be treated in the same way as cryptocurrencies.
“When I hear people talking about the idea that we need a regulator for cryptocurrencies, I would say that we should have one regulator for banks first, but we have three,” Brooks said. “The last thing we have to do is add another regulator to a system that already has dozens of regulators.
“If I’m a crypto lending platform, it should probably be regulated by the FDIC. If I am a crypto trading platform, it should probably be regulated by the CFTC and the SEC, but we somehow treat crypto, because it is new, as different from everything else. I’m going to argue that crypto is just an enhancement of the tiered function in the system. “
The CEOs of Circle, FTX, Bitfury, Paxos, Stellar Development Foundation, and Coinbase Inc. are answering questions from US lawmakers about the state of digital assets in the country. Cointelegraph reported earlier Wednesday that House representatives have raised concerns about token projects that exercise centralized control over the assets of many users.