Crypto firms won’t leave US despite apparent hostility: Merkle Science CEO

According to the CEO of blockchain analytics firm Merkle Science, the U.S. will not lose its appeal as a cryptocurrency hub, although recent reports suggest otherwise.

A series of hostile regulatory actions against U.S. crypto companies in recent months have turned many top crypto executives elsewhere.

Nonetheless, Muriganka Patnaik, co-founder and CEO of Merkle Science, believes cryptocurrency activity will remain domestic, at least in the medium term.

“My opinion here is a bit contrarian, but I believe that five years from now, the majority of the activity will still be in the United States.”

Patnaik said regions such as India, China and the United Arab Emirates have “strong consumer markets”, while the United States commands much higher levels of innovation and has a “deeper talent pool”. pointed out.

Patnaik also cited the “general market dynamics” of the U.S. economy, particularly transparency around taxation, as the main reason cryptocurrency companies are likely to choose to keep most of their operations in the U.S. rice field.

Recent moves against cryptocurrency companies by US regulators, namely the Securities and Exchange Commission, have created a narrative of “innovation” making its way offshore. In the wake of the FTX collapse, Coinbase CEO Brian Armstrong accused opaque regulation of keeping “95% of trading activity” away from the mainland United States.

https://t.co/0HxlRiI6Sy It was an offshore exchange not regulated by the SEC.

The problem is that many US investors (and 95% of trading activity) have flowed offshore as the SEC has failed to clarify regulation here in the US.

It makes no sense to punish US companies for this reason.

— Brian Armstrong ️ (@brian_armstrong) November 10, 2022

On April 18, Armstrong revealed that Coinbase may consider moving its headquarters to the UK.

Patnaik acknowledged that recent government policy decisions and enforcement actions against Coinbase and Binance have undoubtedly been harsh, but they were all “overreactions to everything that happened at FTX.”

“Over time, things will moderate and become clearer in the United States,” he added.

Related: Crypto Industry Is ‘Destined’ To Be BTC-Centric Due To Regulators: Michael Thaler

Naturally, not everyone agrees with Patnaike.

In an interview with Cointelegraph, General Manager of Binance Dubai Alex Chehade said clear and consistent regulation is desperately needed by all major crypto companies, especially those in the US.

“You don’t want to put it where the goalposts move. For a large company, you need predictability, planning and budget.”

Earlier this year, Ripple CEO Brad Garlinghouse said the crypto industry’s approach to regulation lags behind other crypto-friendly regions such as Singapore, the UAE and Switzerland. In light of this, he argued that the cryptocurrency industry “has already begun to move out of the United States.”

On March 20th, it was revealed that more than 80 companies around the world have applied for encryption services licenses in Hong Kong, amid renewed efforts to make Hong Kong a major Web3 hub.

A few months later, on June 1, Winklevoss-owned cryptocurrency exchange Gemini announced that it would seek to obtain a cryptocurrency services license in the United Arab Emirates. Cameron Winklevoss and Tyler Winklevoss cited “hostility and lack of clarity” in U.S. crypto regulation as the reason.

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