The lack of clarity in USA token regulations is something that is driving off investors of the market. This is the general idea that Michael Arrington has pushed to the public with what is happening today with him and the SEC (Securities And Exchanges Commission), a thing that has happened to many startups and token companies that have adventured to invest in the regulation void that the USA is right now for crypto companies.
Michael Arrington is a successful entrepreneur and well-known person amongst tech-savvy circles. Founder of the known technology site TechCrunch, he went after to more financially focused startups, like Crunchfund (and investment fund for web tech startups) and also Arrington XRP Capital, a cryptocurrency based fund that he has claimed holds more than 50% of its capital in XRP, an altcoin.
But the spotlight in here is the supposed harassment of the SEC to venture investors who want to establish their firms in the USA and operate from there. Michale himself in a tweet informs that he has been hit again by a subpoena requesting information about the customers of some of his startups in the USA.
What he is declaring is troubling: if in reality, legal costs for dealing with this kind of matter is so high, even for a multimillion company like Arrington Capital, then the market is really closing the doors to small cryptocurrency based startups and pushing this kind of investors more and more to exile. He is clear in his tweet: They will not invest more until the regulation mess is sorted out.
And this whole situation is going out of control for the whole industry. earlier this week, cryptocurrency leaders went to Congress to ask for better and clearer regulations for cryptocurrency related companies, a thing that is very rare in a country where deregulating seems to be the norm. But these things take time, and the government has always been slow when it comes to making decisions of this importance. The sad thing is this fact will drive investors out of the country; like Michael himself said: “Pivot to Asia”.