In an attempt to mitigate regulatory scrutiny, and streamline the delivery of funds to owed parties, Celsius, an established crypto lending platform that suffered bankruptcy last year, has gained court’s approval to liquidate its altcoin holdings. The distribution will occur exclusively in the leading cryptos, Bitcoin (BTC) and Ether (ETH), following Bankruptcy Judge Martin Glenn’s green light to the proposal.
Interestingly, the go-ahead was mutually agreed upon after interactive sessions both with the Securities and Exchange Commission (SEC) and several other regulatory state agencies. The SEC has lately raised a regulatory eyebrow at a number of less popular crypto tokens, branding them securities needing regulatory oversight. It is against this backdrop that Celsius is granted the express right to convert non-BTC and non-ETH cryptocurrency assets to BTC or ETH, with trading commencing on July 1, 2023.
Earmarked for this move by the SEC are tokens attached to well-liked cryptos such as Cardano (ADA), Polygon (MATIC), and Near (NEAR), amongst others. The enforcement action against such coins suggests perhaps a tightening grip by the regulators on the financial harness of the crypto market.
A degree of consternation ripples through the crypto world as this trajectory risks crippling many major crypto exchanges, including the likes of Coinbase and Binance, whose integral operations significantly include the listed crypto tokens. This echoes in the recent dealings with Voyager, a bankrupt crypto lender whose plans to sell off were thwarted by the SEC’s insistence that its VGX token could indeed constitute a security. The consequent delay brought about Binance.US calling off its earlier interest to buy Voyager’s assets.
While the intervention of the regulatory bodies can be viewed positively for enforcing guidelines and ensuring investor protection, the apparent stifling of the potentials of these cryptos and these exchanges draws an outlook that treads warily into a future bottlenecked by overreaching regulatory parameters. Blockchain enthusiasts and players can’t help but ask if these scrutinies should instead prove more equitable, judiciously placing the crypto market in a spotlight that encourages its expansion, rather than its suppression.
It is, therefore, essential to balance this scale by factoring into policies, the decentralized ethos of the blockchain, while also upholding investor protection and rights, which ultimately are at the crux of every regulatory stance.
Source: Coindesk
