Circle CEO: 'We're seeing crypto firms flee from the U.S.'
A banking crisis, heavy-handed authorities, regulatory uncertainty: Circle's CEO says the U.S. crypto sector is at risk.
A banking crisis, heavy-handed action by authorities, regulatory uncertainty: Circle's CEO says the U.S. crypto sector is in danger.
Circle CEO Jeremy Allaire is sharply critical of the current heavy-handed crackdown on the crypto industry by American authorities. "We’re seeing crypto firms flee the United States," Allaire said. "People would rather put their money in the Bahamas because they’re afraid of what will happen in the U.S." said Circle's CEO during Paris Blockchain Week on March 23, 2023.
Circle is the company behind USDC, the second-largest stablecoin after Tether, with a market cap of nearly $35 billion. The U.S. is currently experiencing the biggest banking crisis since 2008, and American authorities are cracking down on crypto firms. The SEC is launching a wave of lawsuits. The charge is almost always: unregistered securities offering. While reports pile up that, for example, the crypto firm Ripple with its token XRP is likely to come out as the winner from the long-running legal battle against the SEC, stringent action against the crypto sector remains enough reason for projects in the space to look the other way.
The crypto sector operates without banks
At the same time, two of the leading banks, Signature and Silvergate, collapsed. Thousands of companies relied on these two banks to exchange cryptocurrencies for U.S. dollars. "It's already hard for crypto firms to find a bank that wants to do business with you. Now it's being made even harder. You can't open a JPMorgan account. You can't call them and ask... Will you take my money," Allaire continued.
Some critics, like analyst Nic Carter, accuse the U.S. government of deliberately cutting the sector off from the banking system. They call it "Operation Chokepoint 2.0." Circle was also hit by the Silicon Valley Bank case. The company had $3.3 billion in reserves there. The stablecoin briefly lost its peg to the U.S. dollar due to market panic.
