In a recent news, the Securities and Exchange Commission (SEC) in the US sued crypto exchange, Coinbase, for violating US securities laws. This move is not a surprise, as many crypto companies, including Coinbase, have been demanding more clarity from the regulatory body for a long time. However, SEC Chair, Gary Gensler, denied there has been a lack of clarity, stating that “there’s been clarity for years”.
Gensler went on to explain that the investing public has the benefit of securities laws, and crypto should not be different. He believes that the crypto platforms need to come into compliance and protect the investing public. It is interesting that Gensler remains steadfast in this belief, despite the fact that many in the crypto industry do not see the regulatory laws as clear.
This news caused the stock price of Coinbase to open nearly 20% down on Tuesday. However, it is important to note that Coinbase is still up roughly 45% for the year.
Moreover, Gensler also contested the need for more digital currencies, considering that around 16,000 of them are tradable via Coinbase. He stated that the US dollar, the Euro, and the Yen are already digital currencies and therefore, questioned the underlying value of the tokens.
It is worth noting that the SEC has been investigating other major crypto players as well. In this latest action against Coinbase, the regulator has confirmed that going after them and Binance wasn’t a sudden decision. They have had discussions with companies that have a business model largely based on non-compliance with securities laws.
Altogether, the lawsuit against Coinbase signals that the SEC is taking a firmer stance on cryptocurrencies. Despite the growing popularity of these digital assets, the regulatory framework governing them still has some grey areas. Therefore, this lawsuit is an important step towards bringing some clarity and establishing clear guidelines for the crypto industry.