Chris Larsen believes that the United States needs to reevaluate and clarify its approach regarding crypto regulation to ensure a competitive and booming industry. He advocates for legislative clarity and expresses concerns about the consequences of current policies on the nation’s crypto innovation landscape.
Chris Larsen, co-founder and chair of Ripple Labs, has expressed deep concerns regarding the United States’ approach to cryptocurrency regulation under the Biden administration. In a recent interview, Larsen criticized what he sees as a series of mistakes in the government’s handling of the crypto industry.
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Larsen’s primary statement is the lack of clarity and consistency in crypto regulations. He pointed to a recent court victory on July 13, 2023, for Ripple Labs against the Securities and Exchange Commission (SEC) as evidence that the SEC has struggled to enforce its regulatory agenda effectively. According to Larsen, the SEC “lost on everything important” in the case, which he believes underscores the need for more transparent and precise regulatory guidelines.
Furthermore, Larsen expressed doubt about SEC Chair Gary Gensler’s approach to crypto regulation. He blamed Gensler for favoring ambiguity in the rules, allowing him to exert authority through pressure and making up rules on the fly. Larsen highlighted the importance of clear, legislatively established rules over the control of unelected decision-makers.
Recently in a report by Todayq News on August 25, 2023, the US Treasury Department mandated cryptocurrency brokers to report user transaction data to the IRS to combat tax evasion. They introduced Form 1099-DA to simplify tax reporting for cryptocurrency and NFT transactions. However, Patrick McHenry criticized new cryptocurrency tax rules and called them too broad and part of the Biden Administration’s crackdown on digital assets. The rules cover DeFi and NFT platforms but exclude mining and staking operations.
Larsen also criticized the impact of Biden’s crypto policies on San Francisco’s status as a blockchain hub. He argued that these policies had effectively driven innovation and businesses away from the city, declining its reputation as a global blockchain capital. In contrast, he highlighted cities like London, Singapore, and Dubai, which have embraced clear and consumer-friendly regulations, attracting blockchain innovators and investors.
As the cryptocurrency industry continues to evolve, the need for clear and consistent regulations becomes increasingly pressing. Chris Larsen’s critique highlights the challenges and opportunities facing the United States as it navigates the regulatory landscape of this rapidly growing sector.