It should be noted that the inadequate approach to cryptocurrency regulation has previously been criticised by Binance exchange chief Changpen Zhao. He did so in mid-February, immediately after the Securities and Exchange Commission banned the BUSD stablecoin issued by Paxos and Binance. As Zhao pointed out at the time, BUSD is one of the most regulated steibles that complies with all necessary regulations. However, even that did not save the token from increased regulatory scrutiny.

As a result, Zhao said that founders of various cryptocurrency startups should seriously consider relocating. According to him, the pressure of US regulators on such companies is becoming increasingly evident, so only more problems will await the entrepreneurs in the future.

In late March, Daniel Seifert of cryptocurrency exchange Coinbase predicted America’s loss of cryptocurrency primacy. According to him, the aggression of US regulators is scaring away companies that could work there and bring money to the budget. As an example, Seifert mentioned the NFT exhibition at the Louvre, which was part of the Paris Blockchain Week event.

You can read more about the expert’s point of view here. Apparently, Andreessen Horowitz’s analysts would definitely agree with him.

Why cryptocurrency companies are moving

In 2018, the United States was home to nearly 40 per cent of crypto startup developers from around the world. By today, less than 30 per cent of them are willing to do business in the US. In addition, the share of traffic to cryptocurrency-related sites from US users is now in its third year of decline.

According to Decrypt’s sources, last year, Americans accounted for just over 15 per cent of traffic to platforms like CoinGecko, CoinMarketCap and Etherescan. In contrast, the figure was at 23 per cent in 2019, indicating a marked change in trends.

Much of this trend is due to the increasing decentralisation of the Web3 sphere globally, as well as the falling capitalisation of the crypto market during the global bearish trend. Nevertheless, US regulators are also “to blame for what is happening”. Here’s an expert commentary on that.

Banning new business models or technologies undermines American values and also leads to an exodus of innovation and jobs to other countries. Open companies and their customers deserve access to financial services and legal protection.

Examples of adequate treatment of digital assets include Hong Kong. There, from the beginning of summer 2023, ownership and transactions in crypto will become fully legal for locals, which, among other things, is already attracting major cryptocurrency companies. In particular, at the end of March, representatives of OKX, a cryptocurrency exchange, announced the launch of a unit in Hong Kong. Tron founder Justin Sun also said he wanted to move to the area. Incidentally, he attended a Binance cryptocurrency exchange party last night called Glow Up Night in Hong Kong. Accordingly, Sun can now be found there.

Under the threat of a lawsuit is now also the largest US crypto-exchange Coinbase, which had earlier received notice of a possible lawsuit from the US Securities and Exchange Commission (SEC). The same commission also banned cryptocurrency stacking on the Kraken exchange for US customers, while at the same time fining the latter $30 million.

Overall, a16z believes that lawsuits against cryptocurrencies set dangerous precedents for regulating the industry through coercion. This is hardly the worst way to engage with innovation in the country, something that has been emphasised by various notables in the cryptosphere many times before. In this case, proper regulation of the crypto market should be in the interest of the US government, because otherwise the country will simply lose influence in the industry.


We believe that the lack of an adequate regulatory framework for cryptocurrencies today will cause some states to lag behind in terms of technology in the future. Still, the US in 2023 made it clear that constant fines and lawsuits against crypto-giants could scare them off and force them to move to another region. Well, Hong Kong has made it clear that good treatment of digital assets will benefit and attract investors along with entrepreneurs. So the question is how soon officials will realise this and what they will do with this information.