The waters have been very hot in the crypto industry this week. The U.S. Securities and Exchange Commission (SEC) has filed two separate lawsuits against two of the largest crypto exchanges in the world: Binance and Coinbase.
“This is about both investors and issuers in the crypto space, to bring them into compliance,” SEC Chair Gary Gensler said in a live interview with CNBC on Tuesday morning. “We brought a number of actions. We stand ready to continue to work with the industry.”
The industry is asking why these suits took so long to come to fruition, why some crypto assets are being labeled as securities and not others, and whether the SEC’s actions will impact domestic and global fintech innovation – all of which Gensler tried to address.
Gensler didn’t hold back his feelings on the industry’s significance: “We don’t need more digital currency. We already have digital currency. It’s called the U.S. dollar, it’s called the Euro, it’s called the Yen. They’re all digital right now […] so what’s the real underlying value of these tokens?”
The SEC chair also said the agency has had conversations with “dozens of crypto incumbents” and currently believes that the industry’s business model is “built on non-compliance with the U.S. securities laws” and many are “commingling various functions that in traditional finance we don’t allow.”
What we’re doing at the SEC is pro-innovation, because without trust, the capital markets really don’t work. Gary Gensler, Chair, SEC
Whether or not the lawsuits are fair, many people in the industry believe that they do highlight the need for clearer regulations in the sector.
“The runway for coming in and registering was coming to an end, and it appears to have ended,” said Joshua Ashley Klayman, head of blockchain and digital assets at Linklaters LLP. The SEC actions appear to be signaling a move to “meaningfully and forcefully change existing crypto market structure,” she added.
All in all, the lawsuits are a “pivotal event” for the crypto ecosystem and exchanges, according to Jack Vinijtrongjit, co-founder and CEO of web3 infrastructure firm AAG.
In his view, there could be eventual benefits from the SEC’s actions. “The lawsuit could initially create uncertainty and volatility in the U.S. crypto economy,” Vinijtrongjit told TechCrunch+. “There might be short-term setbacks, but in the long run, it could lead to a more robust regulatory framework, which might be beneficial for the industry’s growth.”
SEC Chair Gensler lambasts crypto industry after agency charges Binance, Coinbase by Jacquelyn Melinek originally published on TechCrunch
https://techcrunch.com/2023/06/06/sec-chair-gensler-binance-coinbase/
