- United States Securities and Exchange Commission (SEC) chair Gary Gensler announces lawsuits against Binance and Coinbase
- The lawsuits seek to bring the crypto industry into compliance
- Gensler noted that the agency had brought a number of actions and is ready to cooperate with the industry
United States Securities and Exchange Commission (SEC) chairperson Gary Gensler announces lawsuits against two of the largest crypto exchanges in the world, Binance and Coinbase.
The official said the lawsuits were designed with investors and issuers in mind and tried to bring the crypto space into compliance. The two lawsuits, filed separately, were announced in a live interview on Tuesday morning. Gensler said the agency had brought several actions and plans to continue cooperating with the industry.
SEC Files Lawsuits Against Binance and Coinbase
On the other hand, the crypto industry is asking why the recently-announced lawsuits have taken so long to come to fruition. They also asked why some crypto assets are considered securities while others are not and whether or not the SEC's actions will affect domestic and global fintech innovation, as per TechCrunch.
While the SEC chair did not hold back his feelings regarding the crypto industry's significance and tried to address all the concerns, he bluntly said there is no need for more digital currency. He argues that global currencies are already available as digital currencies, which led him to question the underlying value of tokens.
Gensler also said that the SEC already had conversations with "dozens of crypto incumbents" and now believes the industry's business model was built on non-compliance with the United States securities laws. He added that many of them are commingling various functions that are not allowed in traditional finance.
Many people in the crypto industry believe that whether or not the lawsuits are fair, they do not highlight the need for clearer regulations. In a statement, the head of the blockchain and digital assets at Linklaters LLP, Joshua Ashley Klayman, said that the pathway for coming in and registering was nearing its end.
Registering Crypto as Securities
The SEC chair also noted that there were more than 200 tokens that were listed on Coinbase as well as Binance. However, he said that the commission wanted to prove that one of these was a security that needed to be registered legally, according to CryptoPotato.
Gensler argued that the commission is trying to prove that at least one of them is a security, which means they would be required to register and have rule books against fraud and manipulation as an exchange, broker, and the like.
The development is seen as a gamble on the SEC chair's part and an unusual political action by a regulator. However, it was considered overall successful as even his biggest critics in the industry acknowledged that Gensler put the two crypto exchanges on the defensive.
This is particularly true for Coinbase, which was backed into a corner during the week when the company planned to put forward a narrative that seeks to cooperate with Congress to create a better regulator regime, said Fortune.
