US a Crypto Exchange Scarecrow

For several years now, a number of prominent exchanges have opted not to serve U.S. citizens; in fact, the list of trading platforms avoiding the U.S. is still growing, with Bancor recently announcing that it would block U.S. citizens from using its website to convert tokens.

As can be guessed, regulation - or rather, the lack of clear regulation - is the main reason why crypto exchanges are increasingly shying away from the U.S. Exchanges complain about the uncertainty of U.S. securities legislation, about the failure of legislators to respond quickly enough to the rise of crypto with corresponding laws, and about how the lack of a transparent regulatory framework is putting America's domestic cryptocurrency industry at a competitive disadvantage.

Despite the relative hostility of the current regulatory environment, industry figures are hopeful that it's only a matter of time before the U.S. government and legislature come through with clear and workable crypto regulation.

With certain new exchanges also setting up in the U.S., it would seem that crypto is prepared to do what it takes to crack the American market.

While the blocking of U.S. customers has gathered steam over the past few months, the first notable instance of exclusion occurred in August 2017, when Bitfinex announced that it would "Be discontinuing services to our existing U.S. individual customers." Then the biggest exchange in terms of BTC/USD trading volume, Bitfinex blamed crypto-fiat banking difficulties for the decision, the likelihood that regulation could become stricter rather than more permissive, and the relative unimportance of U.S. customers for its revenues.

Aside from the exchanges that have pulled out of the U.S., there are also dozens of platforms that have always blocked U.S. customers.

"There's no question that the current regulatory approach to crypto in the U.S. breeds uncertainty and could harm innovation. We have advocated for a clear, forward-looking regulatory framework so the U.S. can realize the full potential of crypto and blockchain technologies. That advocacy will continue and will ramp up, especially now that Facebook's Libra is causing many to reckon with crypto for the first time."

Crypto in the U.S. On the other hand, some exchanges argue that the regulatory situation isn't that disadvantageous for the U.S. crypto industry, and that the picture is more mixed and nuanced than some protestors would have you believe.

Precious Kenneth W. - the CEO of decentralized exchange Dexage - told Cointelegraph that, even if American retail customers have been negatively impacted by U.S. regulations, institutional actors and investors have had more power to circumvent restrictions.

"We're on record talking about the need for laws to treat crypto differently, rather than understanding it through the nearly century-old securities framework, and only Congress may make that change in the U.S.," Coldebella added.