In New York District Court, the SEC subpoenaed bitcoin exchange Coinbase. After condemning Binance, the US federal agency has published its latest positions.
Breaking news: Coinbase, a cryptocurrency exchange, has been formally subpoenaed by the SEC in New York District Court. Here are new positions from the US federal agency that is doing all in its power to obstruct the cryptocurrency business, a day after criticizing Binance.
Charges brought against Coinbase by the SEC
Today marks the filing of a new lawsuit by the US Securities and Exchange Commission, this time against Coinbase, one of the most law-abiding bitcoin exchanges in the market.
The US agency filed a formal complaint against Coinbase in the US District Court for the Southern District of New York, alleging that it had violated “registration provisions.”
The exchange allegedly violated the Securities Exchange Act of 1934 and Securities Act of 1933. Brian Armstrong’s business is accused of selling unauthorized security tokens and failing to register its staking-as-a-service. Notable cryptocurrencies include SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO. The SEC lawsuit against Binance mentioned some of these coins. To reiterate, investors expect a return on security tokens dependent on the issuing company’s success. Coinbase and Binance were supposed to register these items with US regulators and get approvals.
The head of the SEC’s enforcement division added scathing criticism for Coinbase while maintaining that the costs were calculated correctly:
The implications for the investing public are simply too severe to ignore the rules because you dislike them or would prefer other ones.
It would be very fascinating to see how the cryptocurrency exchange reacts and whether it really will leave the US market, as it had threatened to do in the event that US federal officials did not cooperate.
The biggest rival to Coinbase, Binance, has similarly stated that it will aggressively defend its stance against the SEC’s bullying, without specifically mentioning any changes to its business practices.
The potential for excessive regulation
The way the SEC is fighting Coinbase, as well as generally all exchanges and significant cryptocurrencies in the market, is completely absurd.
First off, it is embarrassing that in 2023, multibillion-dollar businesses operating in specialized industries with a focus on technology are required to abide by standards from the 1930s with no provision for exceptions.
Second, despite the fact that many of the cryptocurrencies the SEC listed as securities have been there for a while, the US agency has only recently been able to recognize them as such, allowing businesses like Binance to focus only on trading these items.
In the end, it is clear that the introduction of such strict regulations for cryptocurrency exchanges is a result of a clever political ploy to ensure that the door is left open for the development of a CBDC, which is nothing more than a centralized cryptocurrency subject to governmental regulation.
The crypto sector fiercely defends its rights and denies the accusations and bravado. The SEC risks killing the US blockchain sector for decentralized cryptocurrencies if it continues. Cryptocurrency service providers may go to Europe, where MiCA is less restricted, damaging the nation. Competition from neighboring continents may slow technological advancement across the continent, giving Chinese rivals an advantage and causing it to lose tech market control.
On the other hand, since cryptocurrencies were created specifically to get around centralized powerful entities, they are likely to remain unaffected, at least in the long run.
In particular, Satoshi Nakamoto popularized Bitcoin with the specific intent of making it resistant to censorship and potentially viable in any socially and economically challenging circumstances.
The time has come to defend these principles since bitcoin and other crypto assets stand for freedom.