The United States Securities and Exchange Commission (SEC) investigates Coinbase, the country's largest exchange. It has also set its sights on global giant Binance, which could mean bad news for cryptocurrency investors in America and worldwide.
Coinbase and Binance have gone above and beyond to comply with all regulations. For example, Binance operates a separate division called "Binance US," which only offers limited services for American customers to avoid violating any regulations. But it seems that's still not enough for SEC to back off.
On the other end, crypto-friendly regulators, the Commodity Futures Trading Commission (CFTC), are more likely to adopt an approach that is not based on enforcement and lawsuits.
It has been reported that the SEC staff is currently investigating every US crypto exchange, according to a Forbes report; however, no further details were given, so it remains unclear what stage each business stands at or if they are even aware of these investigations happening in relation with them.
The Securities and Exchange Commission operates outside its jurisdiction because crypto assets have not yet been legally classified as securities.
In an interview with Republican Sen. Tom Emmer, he said that the agency and its anti-crypto chair Gary Gensler are "hell-bent on expanding their jurisdiction using enforcement as a tool for it." According to an anonymous official, the US Securities and Exchange Commission has called for a quick resolution to their dispute with the CFTC over cryptocurrency jurisdiction.
The recent introduction of two bills to give the CFTC more jurisdiction over cryptocurrencies has sparked optimism among traders. However, the officials are still not expecting either bill to be passed this year. The Lummis-Gillibrand bill was submitted on June 7, and the Digital Commodities Consumer Protection Act was also announced.
If the United States is serious about cracking down on cryptocurrency exchanges, it's only a matter of time before they receive Wells Notices from the SEC. When a company is about to be penalized for breaking the law, they receive this letter. It has been reported that these instances are separate from standard SEC procedures.
The exchange Binance.US delisted AMP this week after SEC deemed its security.
Crypto regulation in America continues to be a hot topic with little sign of conclusion. This only prolongs the uncertainty for companies trying to comply, which ultimately serves no one's interest.