From Cointelegraph

March 22, 2025 9:00 AM:

Cryptocurrency companies once operated comfortably in the US, conducting initial coin offerings. Now, they operate offshore, geofencing the US due to regulatory challenges. However, new crypto regulations, potential tax changes, and dropped enforcement actions signal a possible return to the US for these firms.

The SEC shifted its stance on cryptocurrency regulation in 2017, identifying many tokens as securities. Tax implications also became complex, with token sales generating significant tax liabilities for US companies. Despite efforts to comply, the regulatory landscape remained uncertain for many crypto projects.

The SEC v. LBRY case in 2023 further muddied the waters, with the court ruling that tokens with consumptive and speculative uses could be considered securities. This ruling had a chilling effect on the industry, pushing more projects to go offshore and decentralize to avoid legal challenges in the US.

The LBRY case highlighted the challenges faced by cryptocurrency projects in the US, leading many to decentralize and operate offshore to navigate regulatory uncertainties. The hope for a regulatory framework to operate legally in the US faded, with decentralization becoming the preferred option for many firms in the industry. In 2023, crypto projects sought to avoid US regulations by establishing foundations in offshore jurisdictions like the Cayman Islands. Through these entities, they could sell tokens without US securities law restrictions, aiming to achieve decentralization for legal US operation. Many crypto exchanges relocated to friendlier jurisdictions for compliance and tax advantages.

However, recent developments suggest a shift in US crypto regulation. SEC Commissioner Hester Peirce is exploring ways to provide relief for token issuers and create a regulatory framework that treats token launches as non-securities. Innovations like the decentralized unincorporated nonprofit association (DUNA) and proposed tax treatments for crypto tokens may encourage onshore operations. Additionally, tax attorneys are devising more efficient fundraising methods like token warrants.

These changes could lead to a more welcoming regulatory environment for crypto projects in the US, potentially reducing the need for offshore structures and offering new opportunities for compliance and growth.

Read more at Cointelegraph.com

1. Bitcoin hits new all-time high of $60,000, driven by institutional interest and positive market sentiment.
2. Ethereum also reaches record high above $2,000 as demand for decentralized finance (DeFi) continues to grow.
3. Tesla announces $1.5 billion investment in Bitcoin, sparking a surge in cryptocurrency prices.
4. Bitcoin’s market cap surpasses $1 trillion for the first time, solidifying its position as a mainstream asset class.: Will new US SEC rules bring crypto companies onshore?