According to Senator Cynthia Loomis’ office staff, there will be no escape from Uncle Sam’s vast network of crypto-regulation.
The US Securities and Exchange Commission is investigating Coinbase, the country’s largest exchange, and has also set its sights on global giant Binance, according to Lummis office staff.
Coinbase and Binance are determined to back out to please regulators with the latter operating a separate division (Binance.US) with limited services for US clients.
Apparently, this is still not enough for the SEC, while the more favorable regulator of cryptocurrency, the Commodity Futures Trading Commission (CFTC), is likely to adopt an approach that is not dependent on enforcement and lawsuits.
Every cryptocurrency exchange in the US is going through various stages of investigation by the Securities and Exchange Commission, according to a Forbes August 4th report.
Cryptocurrencies are not securities… yet
However, crypto assets are not officially classified as securities, so the SEC is technically operating outside its purview.
This was hinted at by Republican Senator Tom Emer, who said last month that the agency and its chief anti-cryptocurrency chief Gary Gensler “intend to expand the size of the Crypto Enforcement Division using enforcement to unconstitutionally expand its jurisdiction.”
However, there is a glimmer of hope, as the SEC urgently wants to resolve its dispute with the CFTC over the jurisdiction of cryptocurrencies, according to the unnamed official.
“If the matter is not resolved internally, lawmakers will have to step in, and Congress will likely stand by the CFTC,” he said.
Two bills were recently introduced to give the CFTC more jurisdiction over cryptocurrencies, however, the official said, there is less than a 50% chance of either being passed this year. The Lummis-Gillibrand bill was introduced on June 7, and the Digital Goods Consumer Protection Act was announced this week.
According to a cryptocurrency exchange executive, several US exchanges likely received Wells’ notices from the Securities and Exchange Commission as part of their enforcement campaign. These are used to formally inform companies when action is taken against them. The unnamed executive also said these cases are separate from standard SEC procedures.
Binance.US already delisted an asset that the SEC had deemed a security this week when it dropped the AMP token.
The battle for regulatory control of cryptocurrencies in America is raging and unlikely to end any time soon, which only serves to prolong the uncertainty for companies trying to comply.
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