The unexpected detainment on Thursday of Alex Mashinsky, the genesis behind Celsius, intensifies discussions surrounding crypto regulation and the appropriateness of century-old laws for moderating contemporary platforms like Binance and Coinbase. This event, occurring against the backdrop of increasing judicial scrutiny over the apparent authority of the Securities and Exchange Commission (SEC) to oversee crypto, and a recent cooperative bill aimed at expanding the Commodity Futures Trading Commission’s (CFTC) crypto reach, provides significant discussion points.
Mashinsky, despite vehemently denying allegations of wire fraud, securities fraud, and price manipulation of Celsius’ token CEL, is a clear testament to the ambiguous state of crypto regulation. Notably, his case emerges concurrently with a ruling that favored Ripple, asserting the XRP token’s exchange algorithm sales didn’t fall under securities law. This intertwining of events might have considerable implications for cases involving Coinbase(COIN), Binance, and Bittrex accused by the SEC for omission of registration due to the trading of tokens such as solana (SOL), polygon (MATIC), and cardano (ADA) on their platforms.
Moreover, Mashinsky’s distinction of his case from that of Ripple, asserting that CEL was registered with the SEC, adds another ripple to the pool. However, his contention for exemption from registration was that the token catered to financially knowledgeable and accredited investors only. Strikingly, Ripple maintains a formal separation from XRP, a cautionary step missed by Mashinsky. Amidst these issues, the SEC maintains its stance that existing investor-protective regulations should be applied to crypto companies, stressing the need for these companies to comply with current securities laws.
The CFTC, on the other hand, considering large scale cryptocurrencies such as bitcoin (BTC), ether (ETH), USDC, and tether as commodities under U.S. law, takes a differing viewpoint. Despite believing that both Mashinsky and Celsius should have been registered in association with commodity pool operations, CFTC officials express dissatisfaction with the legal status quo, the Celsius incident accentuating the urgency for regulatory modification.
In conclusion, the complex situation calls for a comprehensive regulatory regime as reiterated by CFTC Commissioner Kristin N. Johnson, highlighting the importance of preventive measures to counter potential frauds. The subject matter of crypto regulation, through these incidents, is brought to the forefront of discussion, further accentuating on its necessity.
Source: Coindesk
