The cryptocurrency industry is at a pivotal crossroads where the outcome of two events could dictate investor sentiment, at least in the United States, for years to come. On one hand, Sam Bankman-Fried (SBF), the disgraced founder of the now-defunct crypto exchange FTX, is defending himself against very serious and troubling allegations.
On the other hand, the tone and message coming from Washington DC is a mess. Regulators in the U.S. Securities and Exchange Commission appear to be poised to approve BlackRock’s spot BTC ETF application. While certainly a positive development, the pending application comes at the same time Senator Elizabeth Warren continues to build out what many call an “anti crypto army.”
These seemingly disparate events have a common theme: the looming risk of the US lagging behind its global counterparts in tapping into the potential of cryptocurrencies and blockchain technology. To put it simply, what the US stands to lose, other regions like Asia stand to gain.
The Enron echo and political power play
Peter Easton, an accounting professor at University of Notre Dame, is a name many in the crypto community have become familiar with in recent weeks. His expert knowledge in forensic accounting helped the US government investigate allegations of massive financial fraud at Enron and WorldCom.
Easton’s reputation certainly speaks for itself so when asked at SBF’s trial if his company ever spent user deposits, he responded confidently “oh, yes.” He said that user funds were allocated towards other businesses, real estate deals, political contributions, and charitable donations.
The Enron scandal, Time notes 20 years after coming to light, ‘changed American business forever.’ However, the FTX scandal is further magnified by Warren and other high power lawmakers.
Specifically, Warren is taking a leadership role of more than 100 lawmakers in demanding the Treasury Department and other entities take steps to prevent crypto donations falling in the heads of terrorist regimes.
Now, at the surface this sounds like a noble initiative. But, it is important to keep in mind Warren has been on the attack against the crypto industry for quite some time. Like any politician knows best, one should never let a serious crisis go to waste.
Former Democrat Congressman Tim Ryan and Republican David McIntosh are forming a counter to Warren and her army to educate lawmakers on the benefit of blockchain technology.
Although their ambitions might be too little, too late. McIntosh said an unfriendly crypto environment is “pushing the innovation and the capital for this new technology overseas.”
Asia’s crypto clarity
Contrastingly, the regulatory environment and public perception in Asian markets starkly deviates from the aggressive enforcement and legislative lethargy observed in the US.
Perhaps no one knows this more than Ripple Labs Chief Executive Brad Garlinghouse. He told Bloomberg US law doesn’t even define “what being a good actor looks like” while multiple Asian governments are “providing clear rules” that help spur growth.
Ripple’s long-standing battle with the SEC may have come to an end, but one would assume its team will think twice about heavy investments in the US. But the entity has many initiatives outside the world, including growing partnerships in Asia.
Ripple invested in Japan’s SBI subsidiary MoneyTap in 2020 and continues to focus on targeting multiple Southeast Asian markets to address cross-border inflows.
Japan is making strides in carving out a robust regulatory framework, attracting crypto enterprises and investments. The Japanese Financial Services Agency (FSA) is proactively fine-tuning regulatory guidelines, showcasing a forward-thinking approach towards crypto asset management.
This progressive stance extends to a recent tax reform, lightening the tax burden on crypto entities.Specifically, crypto firms in Japan are now exempt from paying a 30% corporate tax on unrealized gains.
In the conducive regulatory environment of Japan, the blockchain gaming platform Oasys serves as an example of what the Asia-Pacific region can offer. Oasys’s decentralized approach showcases the evolution of blockchain technology in enhancing the gaming sector. Its two-layer design, comprising the Hub Layer and the Verse Layer, tackles typical challenges for blockchain game developers, indicating what favorable regulations can facilitate.
Through strategic alliances and a strong blockchain foundation, Oasys aims to improve the gaming experience, reflecting the broader shift of crypto-industry focus from the West to the East.
Oasys’ mission is in part supported by American capital, including Galaxy Interactive in late 2022. Ubisoft, Crypto.com, Republic Capital, among other notable American firms also participated in multiple financing rounds.
Conclusion
The ongoing SBF trial in the US casts a long shadow on the crypto industry, pushing many to look towards Asia’s welcoming shores for better regulatory clarity and investment opportunities. As Japan and other Asian countries continue to evolve their regulatory frameworks, they are not only attracting foreign investments but also pioneering the next wave of blockchain innovation, with enterprises like Oasys leading the charge.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.