The CEOs of Coinbase (COIN), Ripple and Circle said that a lack of a clear framework from regulators was the reason why most of the crypto trading in the U.S. occurs on offshore exchanges – like the now-struggling FTX.
Replying to a tweet by Sen. Elizabeth Warren (D-Mass.) on the collapse of crypto exchange FTX, Coinbase CEO Brian Armstrong said that FTX was not registered in the U.S. Armstrong added that a lack of clarity from the Securities and Exchange Commission is the reason most U.S. trading activity occurred offshore.
Backing Armstrong, Ripple CEO Brad Garlinghouse pointed to the regulatory framework in Singapore as an example.
"Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There's a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US," Garlinghouse said.
"Compare that with Singapore which has a licensing framework, token taxonomy laid out, and much more. They can appropriately regulate crypto b/c they've done the work to define what 'good' looks like, and know all tokens aren’t securities (despite what Chair Gensler insists)," he added.
Circle CEO Jeremy Allaire also backed Armstrong and added that lack of a proper regulatory framework in the U.S. has left users exposed to the overseas supervisory structure.
In a separate thread Kraken co-founder Jesse Powell echoed the opinions of his peers.
"U.S. lawmakers and regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongfully focuses on convenient, on-shore good actors," Powell added.
When asked in September if the SEC would be more proactive in its regulation of crypto exchanges by CoinDesk, SEC Chair Gary Gensler deflected the question.
Read more: FTX Faces US Justice Department Probe: WSJ
UPDATE (Nov. 11, 09:42 UTC): Adds comment from Kraken's Jesse Powell.
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