The US Securities and Exchange Commission (SEC) has recently made its intentions clear regarding the crypto market, with actions against major players Binance and Coinbase. However, the crypto industry stands in unity, rallying together to seek clarity on crypto rules and guidelines. In light of these events, it is important to understand the key differences between the lawsuits against Binance and Coinbase.
First, the SEC filed 13 charges against Binance and its CEO, Changpeng “CZ” Zhao, with the primary allegations focused on the commingling of funds. Charges include operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities. Meanwhile, charges against Coinbase involve operating an unregistered exchange, broker, and clearing agency, and offering and selling securities in connection with its staking-as-a-service program.
Interestingly, no fraud charges were brought against Coinbase and its CEO, Brian Armstrong was not named in the lawsuit. In contrast, Binance’s CEO “CZ” was named in their lawsuit for commingling of funds and manipulative trading. These differences raise questions about the severity of each case and the potential consequences for each company involved.
Moreover, the SEC alleges that Coinbase, a publicly listed company, failed to register and therefore deprived investors of significant protections, including inspection, recordkeeping requirements, and safeguards against conflicts of interest. The SEC also holds Coinbase’s holding company, Coinbase Global Inc. (CGI), accountable for certain violations. However, there was no proposal in the Coinbase lawsuit to prohibit the firm from engaging in financial-related businesses.
Despite the lawsuits, both the crypto market and Coinbase shares have risen. Bitcoin and Ethereum prices have rallied, while Coinbase shares saw a boost after Cathie Wood’s Ark Invest purchased $21 million worth of COIN shares.
This situation highlights the ongoing challenges and uncertainties that surround the crypto market. It is crucial for clarity to be achieved regarding rules and guidelines, ensuring a fair playing field for all participants. So, while the industry might be facing some obstacles, the determination and unity of stakeholders to seek clearer regulations are certain to propel it forward. The outcome of these lawsuits may very well establish a precedent for other market players and dictate the future trajectory of the crypto space.
Source: Coingape
