The U.S. Securities and Exchange Commission (SEC) sued cryptocurrency platform Coinbase on Tuesday after targeting Binance, the world's largest cryptocurrency exchange, a day earlier, accusing Binance and its CEO Changpeng Zhao of using a fraudulent network. Reuters.
If the lawsuits are successfully completed, the cryptocurrency market will face negative changes: the SEC will assert its control over the industry, which has not been regulated in the field of securities for a long time.
All of this points to an increasingly determined campaign by the SEC to bring cryptocurrencies into the orbit of federal securities laws, whereas the Commission has not previously dealt with such large crypto players.
In its lawsuit, the SEC said that Coinbase has made billions of dollars since at least 2019 by acting as an intermediary in transactions and failing to comply with disclosure requirements to protect investors. At a minimum, Coinbase traded 13 crypto assets that needed to be registered, including Solana, Cardano, and Polygon.
Since filing the lawsuit, Coinbase has lost about $1.28 billion due to a net outflow of customer funds. Shares of Coinbase Global Inc fell $7.10, or 2.1%, to $51.61, after falling 20.9% earlier.
As for the impact of the lawsuit on cryptocurrencies, BTC, after initially falling to $25,350 after the lawsuit against Binance, recovered more than $2,000 and is trading just below $27k. Analysts are confident that the SEC will almost wipe out several altcoins, which will effectively force some crypto traders bitcoins.
The main message of the head of the EC, Gary Gensler, is that tokens are securities, initially focusing on the sale of tokens and interest-bearing crypto products. And only recently, he went on the attack on unregistered dealers, cryptocurrency brokers, exchange trading and clearing activities.
The fact is that no crypto platform works like a full-fledged stock exchange. The SEC also sued Beaxy Digital and Bittrex Global this year for failing to register as an exchange, clearinghouse and broker. According to Gensler, their entire business model is based on non-compliance with US securities laws.