A discussion over the future of the cryptocurrency business and its possible effects on conventional banking has been sparked by the Securities and Exchange Commission’s (SEC) recent lawsuit against Binance, the biggest cryptocurrency exchange in the world. If other nations embrace and support crypto innovation, which results in the replacement of conventional banking institutions, Jim Bianco, president and founder of Bianco Research, cautioned that the SEC’s actions might be a significant mistake. Bianco thinks that the lawsuit is a component of a larger campaign by American legislators to drive cryptocurrency outside of the country.
The SEC filed the action on Monday, stating that Binance has broken U.S. securities laws by making unregistered securities and staking services available to the general public. This comes after the SEC took a similar enforcement action earlier this year against Justin Sun and three of his firms. The regulatory move, in the opinion of Aaron Kaplan, co-CEO and co-founder of Prometheum Inc., shows a trend toward regulated market infrastructure for cryptocurrencies in the U.S., which may eventually be advantageous to the sector and encourage innovation.
An official from Binance responded to the complaint by confirming that the exchange had received a Wells Notice from the SEC earlier this year, which prompted the filing of the case. The SEC also issued a notice to Coinbase, a well-known U.S. exchange, in March about possible enforcement action relating to the listing of unregistered securities. The announcement of the Binance lawsuit led to a 10% Monday share price decline for Coinbase (COIN). In response to the regulatory ambiguity in the US, Coinbase has increased its operations in nations like Canada and the Seychelles.
Although some industry professionals believe the SEC’s actions against Binance were justified and long overdue, others are worried about the lack of regulatory clarity and its possible detrimental effects. A supplier of payment and compliance infrastructure, Banxa’s U.S. CEO and Chief Legal Officer Richard Mico issues a warning that the current regulatory uncertainty may force digital asset enterprises to migrate to more advantageous countries, depriving the U.S. of employment and innovation.
The SEC’s legal action against Binance is welcomed by Steve Rosenblum, the creator of the risk management platform Libertify.com, who has expressed his worries about the exchange’s alleged lack of transparency and restricted access to senior officials at the business.
The legal action against Binance serves as a reminder of how the regulatory environment for cryptocurrencies is always changing. The result of these legal lawsuits will probably influence future cryptocurrency legislation and its effects on market players as the sector comes under more scrutiny.