Antonio Juliano, the founder of decentralized exchange dYdX, recently advised crypto developers to turn their attention away from serving customers in the United States for the next five to 10 years due to a hostile regulatory environment. Juliano suggested that crypto builders should focus on experimenting in other markets and return to the US when conditions are more favorable.
In a Twitter thread, Juliano expressed that serving the US market is not worth the hassle and compromises due to the country’s stringent regulatory environment. He pointed out that the majority of the crypto market is overseas, making it more beneficial for startups to innovate and find product-market fit in these markets before coming back to the US with more leverage.
However, Juliano’s remarks were specifically aimed at startups rather than established projects. He argued that startups could experience faster growth and user adoption by prioritizing markets outside the US, as these markets tend to be more receptive and less restrictive.
The lack of clear rules and regulations surrounding cryptocurrencies in the US has long been a concern within the industry. The ambiguity surrounding the jurisdiction of the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) has hindered the progress of the crypto sector. Juliano suggested that for the industry to have more influence over US policy, it needs to grow further and amass substantial user bases.
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The controversial argument put forth by Juliano elicited responses from various crypto executives who offered different perspectives. Brian Armstrong, the CEO of Coinbase, one of the leading cryptocurrency exchanges, countered Juliano’s view by stating that progress in the US may happen sooner than expected. Armstrong expressed confidence in the US’s ability to adapt and embrace cryptocurrencies, suggesting that positive changes could come as early as next year.
Evgeny Gaevoy, the CEO of Wintermute, aligned himself with Juliano’s view, albeit with a longer timeline. Gaevoy predicted that it would take 2-3 years for the US to become crypto-friendly if the industry succeeds, and it may never happen if it fails. He recommended that crypto builders focus on overseas markets initially and wait for significant growth and adoption before the US becomes more favorable.
Juliano also acknowledged the importance of crypto policy work in the US, recognizing that it takes time to influence policy and that much of the world follows the US’s lead. He emphasized the need for crypto products with massive usage and strong user demand to shape policy decisions.
Due to the regulatory ambiguity in the US, crypto companies have been exploring other markets with clearer regulations. Coinbase, for example, has been aggressively expanding its global virtual currency footprint with operations in Germany, Ireland, Italy, and the Netherlands. The company is also considering a potential move to the UK and Dubai, where the regulatory environment is friendlier.
Similarly, Binance has been making efforts to be regulated in the UK, despite the ban imposed on the company by the UK regulator last year. These moves indicate that crypto companies are actively seeking jurisdictions with clearer and more supportive regulations.
In conclusion, Antonio Juliano’s advice for crypto developers to focus on markets outside the US for the next five to 10 years reflects the challenges posed by the country’s hostile regulatory environment. While some crypto executives believe that progress in the US may happen sooner than expected, others argue for a longer timeline and recommend prioritizing overseas markets. The regulatory ambiguity has pushed crypto companies to explore jurisdictions with clearer regulations, fostering international expansion and growth within the industry.
