The cryptocurrency world has been monitoring the recent legal developments involving the U.S. Securities and Exchange Commission (SEC) and Coinbase Global Inc, one of the largest cryptocurrency exchanges. As the SEC alleges that Coinbase broke the law by not registering as a broker, some experts suggest the regulatory body might have difficulties winning the case.
This situation brings up several interesting questions, namely whether the SEC is overreaching in its attempts to regulate the crypto industry and if Congress needs to step in and clarify which agency has jurisdiction over cryptocurrency exchanges.
Attorney James Murphy highlights that the SEC is accusing Coinbase of acting as an illegal unregistered securities exchange since 2019. However, he points out that in April 2021, the commission itself approved Coinbase’s application to go public. Furthermore, SEC Chairman Gary Gensler testified in front of Congress on May 6, 2021, that the SEC does not hold authority from Congress to regulate crypto exchanges.
If the legal argument stands, it raises the question of which agency should regulate cryptocurrency exchanges, as Congress has yet to provide a clear answer. The potential lack of a legal framework for the SEC’s assertions could prove beneficial for Coinbase’s defense.
The outcome of this legal battle could have significant implications for the future of cryptocurrency regulations in the United States. For now, the uncertainty surrounding the case and the SEC’s actions have led to fluctuations in the crypto market and a drop in Coinbase’s share price.
As Coinbase faces charges for operating illegally, its legal team is likely to refer to Gensler’s testimony from May 6, 2021. Legal experts suggest that this testimony was evaluated internally before presenting it to Congress, meaning there could be a wealth of internal communications discussing the SEC’s stance on the matter. These communications could potentially bolster Coinbase’s defense.
It remains to be seen whether the SEC will be successful in its claims against Coinbase, but this case has undoubtedly sparked discussions around the regulatory framework for cryptocurrency exchanges. Congress may need to consider the issue and determine which agency has the authority to regulate crypto exchanges in order to prevent further confusion and legal complications.
The ongoing legal battles between the SEC and Coinbase have led to increased uncertainty in the cryptocurrency market. However, the outcome could potentially shape the future of cryptocurrency regulations in the United States. Considering the rapid growth of the industry, creating clear regulations to protect investors and maintain market integrity is essential for the continued development and expansion of the blockchain and cryptocurrency sectors.
Source: Coingape
