“The investing public has the benefit of US securities laws.

Gensler’s message to investors: The SEC is here for you. It’s called the euro or it’s called the yen they’re all digital right now. “We already have digital currency: It’s called the US dollar. “Look, we don’t need more digital currency,” Gensler told CNBC on Tuesday. The lack of regulatory clarity is a common complaint among crypto firms, which argue that the United States is pushing the industry overseas, and ultimately ceding authority to foreign regulators that have established clearer guidelines.Īnd that may be true, but Gary Gensler, the outspoken crypto-skeptic and top cop at the SEC, doesn’t seem to care. “Instead of publishing a clear rule book, the SEC has taken a regulation by enforcement approach … So if we need to avail ourselves of the courts to get clarity, so be it.” “There is no path to ‘come in and register’ - we tried, repeatedly,” tweeted Coinbase CEO Brian Armstrong on Tuesday. Of course, Coinbase argues (reasonably) that the SEC already approved its business model when the regulator OK’d it to go public in 2021, and that the company has tried to work with regulators to ensure it is in compliance with the law. And you can’t be in the securities business without a license. In other words, as far as the SEC - the top Wall Street regulator - is concerned, just about any crypto exchange operating in the United States is illegal, because the regulator considers virtually all crypto tokens (minus bitcoin, which I’ll get into later) as securities. “A decent rule of thumb,” Bloomberg columnist Matt Levine has written, is that “all cryptocurrency exchanges are doing crimes, and if you’re lucky your exchange is doing only process crimes.” The big question: Is there anywhere safe to trade crypto? In the meantime, many US investors/believers in digital assets are in limbo. The lawsuits set the stage for litigation that could take months, if not years, to resolve. The moves mark a serious escalation of the SEC’s campaign to rein in an industry that has for years operated in a regulatory gray zone.Ĭoinbase’s stock got hammered Tuesday, falling more than 12%, and Binance saw investors yank nearly $800 million from its platform in the span of 24 hours.

In the span of 24 hours, the Securities and Exchange Commission lobbed two scathing complaints against Binance and Coinbase, saying they operated illegal securities exchanges in the United States. Back-to-back lawsuits against two of the world’s biggest crypto enterprises are sending a chill through the fragile ecosystem of digital assets in the United States.

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