HomeCrypto NewsEl Salvador attracts more Bitcoin companies while the US scares them away

El Salvador attracts more Bitcoin companies while the US scares them away

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Key facts:
  • IBEX Pay, a BTC payment gateway, also decided to leave US territory.

  • Phoenix and Wasabi are on the list of companies that disable services in the US.

The list of companies linked to the bitcoin (BTC) sector and other cryptocurrencies that are fleeing the United States continues to grow. Today it was learned that IBEX Pay, the payment gateway with Lightning Network, decided to leave the United States as of May 31.

Although, until now, the company has not given explanations about his decision, but everything indicates that it has to do with the regulatory attack against the bitcoin ecosystem undertaken by the Joe Biden government. All of this, as part of a strategy that threatens the survival of developers and privacy advocates in cryptocurrency transactions.

IBEX Pay thus joins projects such as the Phoenix, Wasabi and even Trezor bitcoin wallets, which in the course of the last month announced the cancellation of services in the US. All of them allege having to comply with regulations that prevent the use of tools to preserve the privacy of transactions.

The measures taken by the teams behind the bitcoin wallets are a direct response to the feeling of uncertainty and fear that currently predominates in the United States. This, before the crusade against privacy that lavishes Bitcoin that most government agencies advance.

And not only are the wallets attacked by arresting the developers of Samourai Wallet, but threatened with lawsuits, fines and arrests to any figure and company that does not use know-your-customer (KYC) policies, as the FBI recently did.

The chances of being accused of operating without registration, trading securities without permission, contributing to money laundering and terrorist financing, or not paying taxes are now greater. Like it shows, Large exchanges have been sued and fined of the ecosystem, among which Binance, Coinbase and Kraken stand out; and iconic figures such as former Binance CEO Changpeng Zhao are sent to prison.

An increase in this type of legal actions is then expected, which serve as a deterrent practice and thus increase fears that there will be more accusations and arrests against leaders and companies in the sector in the coming months. This, given that the US authorities show a greater willingness to “teach a lesson”«.

The Commodity Futures Trading Commission (CFTC) has already ruled on this, which a few days ago reported about the application of more compliance measures to the cryptocurrency sector in the framework of the substantial rise in the price of bitcoin. This, supposedly as a way “to avoid market manipulation and possible illicit uses of cryptocurrencies,” according to the organization’s statements.

We will probably see in the next 6 to 18 months, or 6 to 24 months, another cycle of enforcement actions because of this cycle of asset appreciation and interest from retail investors.

CFTC Chairman Rostin Behnam .

The Stock Exchange Commission (SEC) and the Department of Justice have followed the same line of action as the CFTC since last year, doubling the number of administrative procedures against the sector.

The result is obvious to the eye. More and more bitcoin companies are leave the United States or suspend part of their services for users in the country. A practice that the community strongly questions and that could even cost Biden the presidency, whose actions promote regulatory arbitrage and cause loss of US leadership in the ecosystem.

There are already studies that indicate this. In 2018, more than 40% of cryptocurrency developers were located in the United States, a percentage that fell below 30% in the last two years, according to the data from the analysis company a16z.

El Salvador emerges on the map of bitcoin companies

It is precisely in this search for countries that offer a better regulatory scenario that not only places like Hong Kong and Singapore appear, but also a small Central American country: El Salvador. The difference between what happens here compared to what is being done in the United States it’s getting stronger.

Proof of this is in the number of companies linked to cryptocurrencies that have already obtained authorization from the National Commission for Digital Assets (CNAD) to operate as service providers in Salvadoran territory. At the moment, there are 22 exchanges, wallets and companies Similar registered before the CNAD.

The number of foreign investors and businessmen who arrive in El Salvador also is on the rise. Many of them are part of the residency program that grants citizenship if USD 1 million in BTC is disbursed to the Bukele government. A measure that is accompanied by a series of laws that favor the investment and migration of bitcoiners from all over the world.

“All Bitcoin companies should come to El Salvador,” said American journalist Max Keizer a few weeks ago. The bitcoiner insists on highlighting the regulatory advantages offered by the Central American country where bitcoin is legal tender since September 2021.

Opposite to what Biden is doing in the US, the Bukele government promotes the development of the bitcoiner ecosystem and open the doors to companies and people linked to the sector.

“We are open for business for all those who wish to build the future in cryptocurrencies,” said the team at the National Bitcoin Office, which in addition to friendly laws offers facilities in matters of procedures. A fact that, even companies like Google, which has just opened its offices in the country, has recognized through local media.

In this way, ecosystem-friendly rules and practices are implemented with the promise of building in El Salvador a kind of paradise for the development of bitcoin and other technologies. A panorama that contrasts with the aggressive scenario that the United States has become.

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