The SEC Will Claim Its Strength If It Wins The Lawsuit Against Binance And Coinbase
- The SEC is introducing tough measures to crack down on crypto with securities regulations.
- If successful, this will be the premise for this US agency to revolutionize the cryptocurrency market by establishing its authority.
According to Reuters, if successful, the US Securities and Exchange Commission’s (SEC) cases against Binance and Coinbase may revolutionize the crypto market by establishing the SEC’s authority over a sector that has long contended that tokens are not securities and should not be regulated by the agency.
The SEC charged Binance, the world’s biggest cryptocurrency exchange, on Monday with mishandling client cash and lying to US authorities and investors about its operations, in a broad case that has the potential to reshape the crypto landscape of power and riches.
The SEC’s action was the second time this year that federal officials accused Binance of violating regulations intended to safeguard US investors. Authorities have long seen the exchange, which claims to have $65 billion in average daily trading activity, as a significant target in their efforts to bring a crypto business based on an expressly anti-government mentality to heel.
The agency also took action against Coinbase, the largest US cryptocurrency exchange, after Chair Gary Gensler repeatedly asserted that most tokens are subject to his agency’s regulation and that large sections of the companies had broken the law. At the same time, US officials cautioned banks to avoid cryptocurrency due to possible threats to the financial system, making it more difficult for American residents to invest.
The SEC claimed in its lawsuit that several of the tokens available on Coinbase were securities, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.
According to Kevin O’Brien, a partner at Ford O’Brien Landy and a former federal prosecutor, the SEC has never taken on such significant crypto players before.
“The two cases are different, but overlap and point in the same direction: the SEC’s increasingly aggressive campaign to bring cryptocurrencies under the jurisdiction of the federal securities laws. If the SEC prevails in either case, the cryptocurrency industry will be transformed,” O’Brien said.
The SEC said in a lawsuit filed in federal court in Manhattan that Coinbase has profited billions of dollars by acting as a middleman on cryptocurrency transactions since at least 2019 while skirting disclosure regulations designed to safeguard investors.
Coinbase’s general counsel, Paul Grewal, said in a statement that the firm would continue to operate as normal and has demonstrated dedication to compliance.
A day after slapping a lawsuit on crypto exchange Binance, the SEC requested the court to freeze the assets of Binance.US on Tuesday evening. The SEC also asked the judge to repatriate both fiat and crypto held by Binance.US’s customers.
The SEC seems like it’s playing Whac-A-Mole with crypto exchanges, according to Oanda senior market analyst Ed Moya, and since most exchanges provide a variety of currencies that function on blockchain protocols targeted by regulators, it appears like this is only the beginning.
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