- The SEC has filed about 130 lawsuits against crypto firms
- The SEC’s war against crypto has far-reaching effects
According to recent data, major cryptos have managed to recover from the losses of the last couple of months. Despite the US SEC waging a war on cryptocurrencies, top coins like Bitcoin, Ethereum and most of the altcoins have registered impressive rebound rallies.
Gary Gensler and the US SEC led fiasco lasted for as long as it could, and now as the crypto market sentiment pivots in the favor of bulls it remains to be seen where cryptocurrencies are headed.
With SEC’s tentacles reaching companies and founders alike, the industry has been rocked by controversy upon controversy with no end in sight.
Both big and small companies have been affected, and it has not come without huge losses. The big ones – who can afford it – have ended up settling, while the small ones have packed up shop.
This article shall highlight the SEC’s war against crypto, why it is happening, and with whom.
Why Is The SEC at War With Crypto?
The SEC has always sought to assert its authority over crypto exchanges on the premise that tokens are securities and must be regulated.
On the other hand, these exchanges have always contended that their tokens are not securities and should not be subjected to the SEC’s regulation.
To the SEC, these exchanges have flouted the rules of which they were made aware. It was alleged that they made a conscious and calculated financial choice to risk enforcement at the cost of business.
The SEC chair Gary Gensler recently said, “There is nothing about the crypto securities markets that suggests that investors and issuers are less deserving of the protections of our laws.”
Unsurprisingly, the SEC has been clamping down on these firms and their owners. About 130 lawsuits have been filed in this regard, with the possibility of more on the horizon.
Who Is The SEC at War With?
The SEC has mostly gone at the throats of crypto exchanges and their founders. Let’s consider the most recent cases:
On June 5, the SEC filed a lawsuit against Binance, its entities, and its founder, Changpeng Zhao. The regulator alleged that the exchange was involved in selling unregistered securities.
In a lengthy document, the SEC outlined how Binance was implicated in an intricate conspiracy of fraud and indifference toward the law.
This is a summary of the complaints:
- Offering unregistered securities.
- Enabling U.S. customers to use Binance.com.
- Wash trading on the Binance.US platform.
- Diversion of customers’ assets.
More than a week after, there have been numerous back-and-forth responses from both parties. Binance has consistently pleaded its innocence, while the SEC aims for the jugular.
The outcome of this case would have a major impact on the future of the crypto ecosystem.
On June 6, the SEC also sued Coinbase for offering unregistered securities. Unsurprisingly, it led to a 12% drop in the exchange’s stock.
In a reactionary move, Coinbase asked them for regulatory clarity and the adoption of new regulations. The SEC replied with a letter sent to the U.S. Court of Appeals for extra 120 days to respond to the exchange’s request.
Both parties have been gunning for each other, with the SEC seemingly dismissing the exchange’s petitions. Coinbase’s Chief Legal Officer, Paul Grewal, opined on Twitter that the regulator’s process is “flawed.”
Coinbase’s efforts have proven effective so far, as the SEC has offered to provide an update by October 11, 2023. Regulatory uncertainty has always been the bone of contention between both parties, so the SEC’s response is highly anticipated.
Even after the Hinman documents went viral, XRP hasn’t had the bullish run many had expected. While the coin improved after the docs were released, a change in sentiment caused its price to later fall to its lowest value this month.
Ripple had previously made some proactive moves in its fight with the SEC. It put out six filings majorly opposing the latter’s arguments about the XRP token being a security.
Furthermore, the company is pushing for the court to deny the regulator’s requests. Consequently, many enthusiasts and experts are optimistic about a win for Ripple Labs.
While it is unclear what effect the new filings would have on the judge’s ruling, the result could set a precedent for future legal battles.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.