U.S. Crypto Regulation Is Delayed and ‘Discourages Investment’ in the U.S., According to Ripple’s CEO. What You Need to Know

According to Ripple CEO Brad Garlinghouse, the United States is “behind the eight ball” in terms of giving clarity on how it will govern digital assets when compared to other major global economies.

And, he claims, this is an issue for investors.

“You’re maneuvering with uncertainty without [regulatory] clarity.” It deters investment, and it definitely deters investment in the United States,” Garlinghouse said at an Axios event on crypto legislation on Thursday.

Ripple, a blockchain-based alternative to SWIFT, the worldwide messaging system that permits financial transactions, was launched in 2012. Ripple has been battling the Securities and Exchange Commission for years on charges that it illegally traded securities through the sale of XRP, a cryptocurrency it uses to enable cross-border transactions. The Securities and Exchange Commission says that XRP, the sixth-largest cryptocurrency by market capitalization, is a security, while Ripple claims it is a commodity.

The lawsuit’s decision might be a watershed moment for the cryptocurrency sector. Ripple may be on the verge of winning after passing a major obstacle this week, but if the SEC prevails, most tokens or currencies traded on U.S. platforms would be considered securities. As a result, how the crypto sector grows and is controlled may be determined.

So, how does this affect investors?

For crypto investors who are unsure what to make of recent regulatory discussions and developments – such as President Biden’s executive order on cryptocurrency, the Federal Reserve’s digital currency report, and the SEC’s recent announcement to regulate crypto exchanges – a number of experts believe that regulation is a good thing.

More regulation might improve the market’s stability and value, as well as provide investors with new safeguards.
How Can You Get Ready for the New Crypto Regulations?

Because cryptocurrency is still in its infancy as an asset class, any new legislation might have a significant influence on investors’ portfolios. But, whatever the future regulation looks like, experts believe there are three things crypto investors should do now to prepare:

1. Don’t stray from your investment strategy.

Regardless of what happens with regulation, sticking to your plan is certainly the wisest course of action. Crypto investors should conceive of their approach in the same way they think about the stock market: just as you wouldn’t stop contributing to your Roth IRA or 401(k) because of a poor day or news, you shouldn’t make major changes to your long-term crypto strategy.

2. Keep track of your earnings and report them to the IRS.

You should also maintain track of your cryptocurrency transactions for tax purposes and declare any cryptocurrency-related income or capital gains. Because the IRS considers virtual money to be property, selling or exchanging it is a taxable event. If you have any unreported crypto, you should review your prior tax returns and consider obtaining a crypto portfolio tracker to assist you keep track of your transactions.

3. Diversify and Protect Your Assets

Take basic precautions to protect your crypto assets from market volatility and potential security concerns. Experts propose diversifying your crypto holdings, much as they do with traditional assets, to mitigate the impact of any new legislation on specific cryptocurrencies or tokens. To better secure your crypto assets against scams or hacks, you might consider transferring them to a hot or cold wallet.

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