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Crypto Exchanges: US SEC Witch Hunt Begins?

Friday, August 5, 2022 ▪ 16:00 ▪

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The United States has about 40 cryptocurrency exchanges according to CoinGecko. According to a close friend of pro-bitcoin Senator Cynthia Lummis, the local Securities and Exchange Commission (SEC) is investigating most of these projects. And not only! Binance is also currently in the crosshairs.

The Securities and Exchange Commission orders a massive raid

The SEC in the United States is not easy. If she is not proving her case against any crypto project in court, it is because she is busy opening an investigation against the company. You must have heard about the dispute between this regulatory body and the American exchange Coinbase. Cause: This $20 billion company did not comply with applicable law in any way by proposing to trade ” securities » is not registered.

As a reminder, 6 things can trigger an investigation by the SEC:

  • unregistered offers of securities;
  • insider trading;
  • accounting deficiencies;
  • lack of supervision;
  • broker-dealer sales practices;
  • and disclosure of misleading or false information.

Everything is now clear in the case of Coinbase. In this list we easily find the accusation of Brian Armstrong’s company.

But what about the others? The rest are other US crypto exchanges and Binance, whose opening of the investigation worries a member of the office of Senator Cynthia Lummis. According to this senior official, the Securities and Exchange Commission is currently investigating their case.

He notes that no confirmation from the agency has been given so far.

SEC Wants to Comply with Commodity Futures Trading Commission (CFTC)

According to the same person, this initiative of the SEC would have to do with the dispute with the CFTC of the United States. If her approach fails, she will fail in the eyes of American lawmakers. The latter will then switch to the CFTC side.

FYI, the Commodity Futures Trading Commission is akin to a federal government agency whose goal is to regulate the derivatives market. Although its attributes are similar to those of the Securities and Exchange Commission, the CFTC stands out for its special oversight of options, agricultural futures, currencies, metals and stock markets.

The dispute with the SEC would refer to the case of Ethereum, which before the arrival of Gary Gensler at the head of the organization was not considered a stock exchange value. Its regulation, like that of bitcoins and other altcoins, therefore reverted to the CFTC. This change in position of the SEC would therefore be the source of a kind of confrontation between the two.

To say that it will be decided by American lawmakers. The CFTC is currently supported by US Senators Debbie Stabenow and John Boozman. On the other side of the aisle are pro-bitcoins Cynthia Lummis and Kirsten Gillibrand, who are pushing a bipartisan proposal to regulate the digital asset with a more comprehensive scope.

Certainly, the need for regulation, especially clear, is necessary for the crypto universe. But from there to leading a witch hunt, ruling with an iron fist, the projects risk losing their momentum. On the condition that the subjects in question count on balance, agreement and the best projections for the future.

Source: The Balance; DRY; Securities Lawyer 101; Forbes

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The blockchain and crypto revolution is underway! And on the day when the effects are felt on the world’s most vulnerable economy, against all hope, I will say that I had something to do with it.

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