What Could SEC’s Battle Bring About In Cryptocurrency Market?

What Changes In The Cryptocurrency Markets Could The SEC Fight Bring About?
The US Securities and Exchange Commission filed a new lawsuit against Coinbase on Tuesday, just 24 hours after filing one against Binance. The entire business model of the cryptocurrency sector, according to SEC Chairman Gary Gensler, is “built on non-compliance.”


We don’t need more digital currency, a top American securities regulator stated in a critical interview with CNBC. Then, using the hypothetical example of the New York Stock Exchange running a hedge fund, he claimed that cryptocurrency exchanges are “commingling a number of functions” that are unacceptable in traditional finance.

“We already have digital currency,” he added. “It’s called the U.S. dollar. It’s called euro. It’s called the yen. They’re all digital now.” Gensler’s comments came after the regulator today sued America’s biggest crypto exchange Coinbase for not having registered as an exchange, clearing house and broker—and allegedly selling unregistered securities.

Yesterday, the SEC also hit the world’s biggest digital asset exchange Binance with 13 civil charges, alleging that the massive crypto company had a “blatant disregard” of American federal securities laws. The complaint alleges that Binance and its CEO Changpeng Zhao misused and commingled customers’ funds.

The SEC has accelerated its crackdown on the cryptocurrency business since Garly Gensler took over as chairman in 2021. Since the FTX digital asset exchange abruptly failed in November over alleged criminal mismanagement, the pace has accelerated. Authorities claim that the exchange mixed customer funds with those of Alameda Research, a sibling trading company, in order to place riskier bets.

For allegedly selling unregistered securities, the SEC has investigated US cryptocurrency exchanges Kraken, Bittrex, and Coinbase this year. The crackdown, however, has alarmed some politicians, mainly Republicans, who contend that the stricter regulations and seeming lack of clarity will hinder innovation in the largest economy in the world. Rep. Warren Davidson was one of the lawmakers to criticise Gensler’s management of the SEC, and he later said that he intended to introduce legislation to address the issue.