Chained Assets - Research
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  • Intro to RWA
    • About This Module
    • RWA Introduction
      • Tokenization Process
      • Why RWAs: Bridging the Financial Gap
      • Why RWAs: State of Crypto and Imp. of RWAs in Crypto
      • Role of Regulations in Real-World Assets (RWAs)
      • Unique advantages for RWA developers
    • Regulations and Startups
      • Balance Between Innovation and Oversight in Emerging Industries
      • Impact of Restrictive Regulations on Blockchain
      • Good vs Bad Players
      • Investor Protection
    • US - Market & Regulations
      • Regulations in US
      • Exemptions in US
      • Table of Regulations
      • Conclusion
      • Other Important Regulations
  • Important Questions for Builders
  • RWA - Focus Areas
    • About This Module
    • Alternative Investments
      • Growth of Alternative Investments Market
      • Types of Alternative Investments
      • Pros & Cons
      • Due Diligence Process
    • Alt Asset 1 - Private Debt/Credit
      • Returns on Private Credit
      • Market Share & Growth of Private Credit
      • Types of Private Credit
      • Private Credit History
      • Important Terms
      • Working of Private Credit
      • Private Credit and Life Sciences
      • Important Metrics and Information points
      • Distressed Debt
      • Challenges faced by Industry
      • Use Cases for New Technology
      • Solutions/Ideas
    • Alt Asset 2 - Private Real Estate
      • Growth of Private Real Estate
      • Real Estate Fund Structures
        • Real Estate Syndication
        • Private Real Estate Fund
          • Fund Types
          • Creating a Funding
          • Closed vs Open ended Fund
          • Sponsor Compensation
        • Private RIETs
          • Setup Prive REIT
          • Important Terms
      • Comparison of Types
      • Important Terms
      • Important Metrics for Private Real Estate Funds
    • Alt Asset 3 - Private Equity
      • Growth in Private Equity Market
      • Types of Private Equity
      • Secondary Markets
        • Statistics- Secondary Markets
        • Top Secondary Market Players
    • Global & Innovative Distribution of Assets
      • Distribution of Assets
      • Consumer Stocks
      • Shareholder Perks
  • Legal
    • Asset Securitization
      • Structure: Traditional Securitization
      • RWA Project Examples with Partners
      • What is a SPV?
      • Role of SPVs in Securitization
      • Benefits of Asset Securitization
      • Structures of Asset-Backed Securities
      • Parties Involved In Securitization Process
      • Structuring the Transaction
    • Cayman Island - Orphan SPVs
      • Core Elements of an Orphan SPV Framework
      • How are Orphan SPVs formed?
      • Management of the Orphan SPV
    • Trusts
      • Key Components of a Trust
      • Trustee
      • Benefits to Investors/Shareholders
      • Examples of Trusts used by Web3 Funds
      • Unit Investment Trusts (UITs)
      • Delaware Statutory Trusts (DSTs)
      • FAQs
    • Global Regulatory Landscape
      • Switzerland
      • Luxembourg
      • Hong Kong
      • United Kingdom
      • Liechtenstein
      • Bermuda
      • British Virgin Islands
      • Cayman Islands
      • Jersey
      • MiCAR
  • MORE
    • Rubrics
      • Rubrics For Top Asset Types
      • SPVs Evaluation Rubric
      • Asset Originator Evaluation Rubric
      • Trusts Evaluation Rubric
      • FAQs
    • References
      • Regulations
      • Introduction
      • Alternative Investment
      • Trusts
      • Custodian
      • Securitization
      • REITs
      • Private Equity
      • Private Real Estate
      • Private Debt
      • Crypto Projects
      • Detailed Reports
      • DeFi Integrations
      • Global Distribution
      • Global Regulations
      • Private Credit - Borrowers
      • People
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  • Market Size
  • The U.S.: A Major Market for FinTech
  • Complexity of Financial Compliance in the U.S.
  1. Intro to RWA

US - Market & Regulations

PreviousInvestor ProtectionNextRegulations in US

Last updated 6 months ago

Market Size

The U.S.: A Major Market for FinTech

The United States is the biggest financial market in the world, making it a primary focus for many global companies. U.S. laws are designed to encourage innovation while ensuring strong protections for individuals. However, to safeguard citizens, the U.S. often adds layers of regulations, which can sometimes become outdated but still need to be followed. This is especially true in the finance sector, where many rules are not always suited for today’s market.

Complexity of Financial Compliance in the U.S.

FinTech companies face big challenges because of the complicated and fragmented U.S. regulatory system. Different federal and state agencies oversee various aspects of FinTech, and many of these rules were created before modern financial technology existed. This makes it difficult and expensive for FinTech firms, especially startups with limited funding, to figure out and comply with all the necessary regulations.

Blue Sky Laws

In the U.S., every state has its own set of rules, known as Blue Sky Laws, which FinTech companies must follow. This means that if a FinTech company wants to operate nationwide, it has to comply with each state’s specific regulations. This adds complexity, as companies must keep up with different laws in every state where they do business.

Regulatory Bodies

The U.S. has multiple regulatory bodies that oversee different parts of the financial industry. FinTech companies have to navigate rules from agencies like the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), and the Securities and Exchange Commission (SEC). Because so many different agencies are involved, it’s hard for FinTech firms to know which rules apply to their products or services.

Licensing Costs

One of the biggest financial challenges for FinTech companies is the cost of getting licenses to operate in different states. These costs can range from $1 to $30 million, covering legal fees, bonds, and other regulatory expenses.

The process of getting these licenses takes time, and companies operating in multiple states often face frequent regulatory exams. This not only adds to the costs but also takes away time and resources that could be used to grow the business. There are numerous licenses that you may require depending on the type of financial activities provided like:

  • Money Transmitter License: For businesses that transfer money or virtual currencies.

  • Lending License: For companies that provide loans or credit.

  • Investment Advisor Registration: For those giving financial advice or managing investments.

  • Transfer Agent License: For managing and transferring ownership of securities.