1inch co-founder SEC stifles US innovation.

The Securities and Exchange Commission (SEC) is taking action against blockchain and Binance, and this could lead to a potential exodus of major Web3 and cryptocurrency service providers from the United States. Sergej Kunz, co-founder of decentralized finance (DeFi) protocol 1inch Network, believes that the SEC’s enforcement action against the two centralized exchanges could have a negative effect on Web3 growth in the country. Regulatory uncertainty in the U.S. could harm the industry, and many companies are considering moving to another country. Kunz witnessed blockchain’s CEO holding talks with United Arab Emirates delegates earlier this year, exploring the possibility of setting up shop in the Middle East. Events in the U.S. contrast with the experience at Money 20/20, where traditional finance companies were interspersed with companies from cryptocurrency and DeFi ecosystems. Europe’s Markets in Crypto-Assets (MiCA) regulations create solid regulatory standards for the cryptocurrency ecosystem, while the U.S. lacks clarity. Kunz said that Switzerland and the UAE have an open-minded approach, putting them far ahead of the U.S. when it comes to DeFi regulations. A major stumbling block for regulators is understanding how smart contracts and settlements work on blockchain systems. Events like the collapse of FTX indicate the risk for users of trusting a centralized party to hold their money or assets.

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