The future of cryptocurrency faces some significant headwinds, as shown in recent conflicts and complications between the United States Securities and Exchange Commission (SEC) and cryptocurrency exchange, Coinbase. According to a recent Financial Times report, the SEC recommended that Coinbase suspend trading in all cryptocurrencies, barring Bitcoin (BTC), before tackling the exchange with a lawsuit.
An evident rupture seems to have emerged between regulatory bodies and crypto-exchange platforms. The SEC, citing Coinbase CEO Brian Armstrong in the FT report, suggested halting crypto trading, only to launch legal action against the exchange for not registering as a broker. Ruffling feathers in the crypto space, the SEC alleges Coinbase concurrently operated as a broker, an exchange, and a clearinghouse for unregistered securities – encompassing 13 different cryptocurrencies, excluding Bitcoin.
This regulatory move, while attempting to establish a sense of security and legitimacy in the ever-evolving crypto environment, has irked Coinbase. The platform has responded claiming that the SEC’s action contravenes due process and amounts to an abuse of discretion. What now ensues is a legal tussle between the SEC and Coinbase. Ripple, another known name in the industry, reaped a partial victory against the SEC, with the commission ruling that Ripple’s XRP token is not a security.
Armstrong’s statement highlights the SEC’s view that, apart from bitcoin, all other assets are, in fact, securities, a perspective that Coinbase contests. But how does the SEC arrive at this standpoint? According to Armstrong, the SEC hasn’t shed any light on this yet, prompting Coinbase’s decision to delist all other assets barring Bitcoin and set its course for the courtroom.
A noteworthy point here is the SEC’s insistence that the enforcement division does not make formal requests to delist crypto assets. However, it does share its own standpoint during investigations, highlighting potential issues under the securities laws.
The imbroglio between Coinbase and SEC draws attention to the uncertain regulatory environment surrounding cryptocurrencies. As unexpected waves of regulations hit the crypto-ship, the question arises: Is cryptocurrency sailing towards a future of compliance and clarity, or will regulatory storms steer it off course towards uncharted waters? Only time will tell.
Source: Coindesk
