The crypto market just had a rough week in mid-May, like a hurricane or tornado hit it. 

As the overall market cap of cryptocurrencies shed billions of dollars in value, the doomsayers came out and repeated the same absurdities: this asset class has no backing, Bitcoin is useless, cryptocurrencies are going to zero. 

Amidst this backdrop, there is cause to wonder if the cryptocurrency revolution is progressing well or facing existential challenges? 

There is no denying that challenges exist. But a significant macro challenge has been lurking since the beginning:

the crypto industry and its participants are not getting enough acceptance or respect from the mainstream.

The sad reality is that many aspiring crypto businesses and participants are living in a closet, and it is time for crypto to come out of that closet. It’s time for the industry to be recognized and widely accepted as being credible, long-lasting, strong and fundamentally sound.

We are already in a vicious circle. Bad actors or spectacular failures continue to appear and give reason for the mainstream to disallow crypto to normally co-exist with the rest of the world. For these reasons, the establishment keeps pushing crypto to the edges of business and society, and forcing it to find refuge in jurisdictions with inherent lax regulation. 

A wild west of crypto is not the modus operandi we want, nor is it the desired final state for this industry. But the mainstream needs to start by being more welcoming. The best blockchain entrepreneurs prefer to operate inside more clement jurisdictions where certainty is not questionable.

Today, many businesses operating in the crypto industry are being discriminated against in more ways than one, a situation that is not stemming from their own making. 

Here are some data points:

• Blockchain startups can’t easily open a bank account at established financial institutions

• Startups have to choose legal constructs rooted in offshore jurisdictions, a situation that makes it even more difficult to be accepted by many Western financial institutions

• Fiat transfers from exchanges to banks are scrutinized, often resulting in sudden account closures

• The SEC has yet to approve a spot Bitcoin ETF, as they keep rejecting or placing on hold one application after another

• Many exchanges are not US-based and rely on external jurisdictions that are more relaxed or offer little oversight on safety or risk controls 

• US/Canadian consumers are often shut down from participating in token offerings

The opposite of this situation is exactly what needs to happen. 

I don’t understand why the US government keeps beating down crypto when the industry is at its doorstep begging for acceptance.

Bitcoin and the underlying blockchain technology are not a purely American invention, but it might as well have been. Most of the original core developers that worked with Satoshi Nakamoto were in the US. Nick Szabo, credited to be the original proposer of smart contracts is American. Ethereum took roots in Canada. Some of the most successful blockchain businesses are US-based. The largest and most successful VC funds supporting the blockchain are also in the US.

So why doesn’t the US government embrace an industry that can easily produce the next FAANG (Facebook, Amazon, Apple, Netflix, Google) set of companies, a fate that would hugely benefit the US economy at a scope of billions of dollars?

Instead, by pushing exchanges and blockchain projects to operate in less stringent regulatory environments, bad habits are being formed and excesses committed without adverse repercussions. 

Blockchain businesses should feel safe about being in the US. I regularly talk to smart US founders that wish they wouldn’t have to select offshore locations to concoct their legal structures, token offerings, or governance jurisdictions. 

When it comes to regulators, there is a difference between protecting investors and preventing them from benefiting from available opportunities. When regulators get fixated on the bad side of crypto, they start to mold their frame of mind around protection at all costs, and that results in an unbalanced outcome and a self-fulfilling prophecy of negativity. 

Regulatory knee jerk reactions are not going to solve anything. This is a time when regulators need to be super smart and display a deep understanding, so they don’t throw the baby with the bath water. 

Actually, regulators need to let everybody in, to get closer to them, so they can regulate them better. Strictly practicing enforcement without clarifying the rules will only continue to frustrate industry participants and push many to jurisdictions that allow them to perpetuate bad behavior. The situation is not as simple as pounding the table while insisting the “tokens” debate is strictly about security vs. commodity vs. utility.

What if crypto were accepted and not discriminated against and became part of the normal business environment? Good things would happen. 

If you want to protect consumers, don't scare off companies, people and projects. Embrace them and learn from them so you can regulate the bad parts but let innovation thrive in the good parts. 

Now that the last hurricane has passed by, the good parts that remain are what counts. 

The proverbial - what doesn’t kill you makes you stronger - applies here. 

There is no doubt the crypto industry will continue building with a stronger base than before.