Crypto leaders bemoan US falling behind UK and other nations for crypto adoption

Lightspark CEO David Marcus said it was frustrating to see the U.S. fall behind when it comes to digital assets.

“It’s disheartening and frustrating to see the U.S. fall behind and failing at retaining and importing the best talents to work on a much-needed upgrade to our financial system," the former PayPal president and head of Meta’s abandoned Diem stablecoin project said on Twitter. "The rest of the world is noticing and taking advantage of this situation.”

Marcus was responding to a tweet by Paradigm co-founder and former Coinbase co-founder Fred Ehrsam, highlighting the Law Commission's new recommendations to secure the UK's position as a global crypto hub. “Imagine if this was a headline from the US government,” Ehrsam noted.

The Lightspark CEO’s comments follow similar remarks from Coinbase CEO Brian Armstrong, that the U.S. regulatory environment was “hurting America’s economic competitiveness.” Armstrong was responding to the SEC’s lawsuit against the crypto exchange earlier this month.

The UK is embracing crypto

The Law Commission’s recommendations, published yesterday, include the creation of a distinct category of personal property to recognize and protect digital assets, the establishment of a panel of industry experts to provide guidance on technical and legal issues and the development of a bespoke legal framework for collateral arrangements involving crypto assets. 

It also called for statutory law reform to clarify whether certain digital assets fall within the scope of existing financial regulations. It's “now for the UK government to decide whether it intends to take the recommendations forward," it said.

The recommendations follow plans from UK Prime Minister Rishi Sunak to make the country a web3 hub, with venture capital firm a16z announcing earlier this month it would open up a UK office as regulators in the U.S. continue their crypto crackdown.

Chris Dixon, a16z general partner, said the firm had "been working with policymakers and regulators across the globe, and during our discussions, it has become clear that the UK government sees the promise of web3," in a blog post on June 11.

Sunak is keen on providing regulatory clarity regarding how crypto businesses should register and operate in the UK. "We must embrace new innovations like web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy," Sunak's office said in a statement at the time.

On an episode of The Scoop podcast earlier this week, Marcus unpacked how Lightspark is helping transform Bitcoin's Lightning Network into a real-time global settlement layer for the internet.