“The fundamental difference between the American legal system and elsewhere […] is the U.S. outlaws bad actions, not tools. Sam Bankman-Fried went to prison for fraud, not crypto,” he says.
But Barbara van Schewick, a professor at Stanford Law School and a net neutrality expert, says that the interpretation of European innovation being stifled by regulation is a flawed conclusion that doesn't account for other societal differences that have an effect.
“There are many different factors that impact innovation,” she says. “The venture capital system is much less developed in Europe. Europe has worked very hard on venture capital, so it's better than it used to be, but it's not where the U.S. venture capital system is.”
Additionally, van Schewick says that the financial culture in Europe is more risk-averse compared to the United States for reasons unrelated to regulations: Since access to capital can be more difficult to obtain in Europe, it's not as socially acceptable for a startup to fail. “In the U.S., people understand that startups fail, and that's not going to break your career. Those types of norms are very different in Europe.”
- Date Published:3/22/2024
- Original Publication:CQ Researcher