Despite the US Securities and Exchange Commission (SEC)’s crackdown against the biggest companies in crypto, one Bitcoin diehard isn’t breaking a sweat.
Adam Back – CEO of Blockstream and popular cypherpunk – believes the crypto industry will simply adapt and relocate if it can’t find a home within the United States.
“It’s a market and there’s a demand,” Back said to Decrypt during the BTC Prague conference last weekend. “Once an exchange shuts down or stops servicing one market, people will just move to another exchange, or move to an international exchange.”
The SEC filed back-to-back lawsuits against both Binance and Coinbase last week – two of the world’s largest crypto exchanges by trading volume. Coinbase intends to fight the agency in court and represent the US crypto industry, but has expressed willingness in moving headquarters to the U.K. if its efforts fail.
The pressure has even forced Binance US to halt US dollar deposits to its exchange, as banks begin to distance themselves from the company after the lawsuit.
Nevertheless, Back believes interested crypto investors will simply move to other currencies if USD liquidity dries up. Certain crypto-friendly banks in Switzerland and Gibraltar, for instance, will accept deposits in the dollar-pegged USDT stablecoin, and let users buy and sell Bitcoin. “Each problem sort of just moves things around somewhere else,” he said.
Back’s company is a major participant in the Bitcoin mining industry, which relies on energy-intensive computer systems to compete for newly produced Bitcoin (BTC). In 2021, China’s ban on Bitcoin miners had a similar effect to the one Back described, sparking a mass migration of mining power from China to North America.
SEC: Bitcoin VS Crypto
The SEC has made it difficult to launch a host of crypto-related products, from exchanges, to interest-bearing accounts, to staking-as-a-service. US-based firms frequently trip into regulatory trouble over disagreements on which products and assets constitute securities, which other jurisdictions have been more transparent about.
One asset that the SEC has ruled out from being a security, however, is Bitcoin. While the Biden administration recommended applying a debilitating excise tax to the mining industry last month, the tax appears to have been taken off the table by Congress as part of debt-ceiling negotiations.
Despite being a cypherpunk, Back has shown agreement with securities laws as an “ethical concept,” and criticized the seignorage characteristic of many non-Bitcoin cryptocurrencies.
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