The US Securities and Exchange Commission (SEC) is just starting to go after the biggest crypto platforms in the world. While it sounds bad for the investors, how the UK will handle the regulation might differ.
Recently, the US SEC has launched legal actions against two prominent cryptocurrency exchanges, Binance and Coinbase. These legal cases have stirred up significant attention and debate within the industry.
SEC Crackdown on Digital Currency Platforms
Starting with the case against Binance, the SEC's complaint appears to contain some intriguing allegations. According to the regulatory body, Binance's CEO, Changpeng Zhao, is purported to have instructed the concealment of access for high-spending US customers on Binance.com.
The SEC presented a message from Binance's Chief Compliance Officer to a colleague as evidence, wherein it was stated, "We are operating as an unlicensed securities exchange in the USA, bro."
Additionally, the lawsuit quoted Binance's CCO as expressing the desire to keep Binance.com unregulated indefinitely. Binance, however, has responded to these allegations, stating that they do not warrant SEC enforcement action and labeling them as unfounded.
Binance operates two separate exchanges, one tailored for the US market and subject to regulation, and another international exchange with more relaxed regulations.
The lawsuits focus heavily on the accusation that the company knowingly facilitated the movement of traders, who were meant to be limited to the regulated exchange, to the international one. This particular aspect of the case has raised concerns and drawn attention to Binance's practices.
Related Article : CryptoWatch: Binance's Massive Case with the SEC and How it Affected Crypto Prices
The Case of Coinbase
Moving on to Coinbase, it is the legal action against this cryptocurrency exchange that has caused anxiety within the industry in the United States. The SEC's complaint alleges that since 2019, Coinbase has been operating as an unregistered broker, exchange, and clearing agency.
The regulatory body claims that Coinbase has consistently disregarded the established regulatory frameworks and evaded disclosure requirements aimed at safeguarding national securities markets and investors.
Coinbase's Chief Legal Officer and General Counsel, Paul Grewal, has expressed his opinion on the matter, stating that the SEC's reliance solely on enforcement measures, without clear industry guidelines, is negatively impacting both America's economic competitiveness and companies like Coinbase, which prioritize compliance.
While the case against Binance includes explicit allegations of misconduct, such as the facilitation of trading for US customers despite publicly refusing to serve them, the case against Coinbase delves into more fundamental matters.
The SEC argues that operating a cryptocurrency exchange itself is illegal. Specifically, the regulatory body claims that certain crypto tokens, including Solana, Cardano, and Polygon (as mentioned in the lawsuit against Coinbase), should be classified as regulated securities.
Furthermore, the SEC deems assisting in the trade of these tokens, even if the projects themselves are legally compliant, as unlawful.
UK on Becoming a Leader in Crypto Regulation
In a report by The Guardian, UK Prime Minister Rishi Sunak might have already seen the potential benefits of the crypto regulation. While some countries are cracking down on crypto firms, this could mean it is a good investment for Britain.
While Crypto founders have good things to say about it, Sunak's leadership is numbered, and it's already too late to take action. If the UK gets another leader with the same mindset as Sunak, the government may allow crypto-friendly laws to pass.
Read Also: Crypto Prices Drop after SEC's Lawsuits Against Binance, Coinbase-Some Coins No Longer Sold
