The U.S. Securities and Exchange Commission (SEC) sued cryptocurrency platform Coinbase on Tuesday, the second lawsuit in two days against a major cryptocurrency exchange, in a dramatic escalation of a crackdown on the industry.
The SEC is accusing Coinbase of failing to register as an exchange, brokerage, and clearing agency while offering trading for crypto assets it considers securities. Coinbase shot back that the U.S. has never established clear rules for crypto companies.
The day prior, on Monday, SEC took aim at Binance, the world’s largest crypto exchange. The securities regulator accuses Binance and its CEO Changing Zhao of operating a “web of deception.”
If successful, the lawsuits could transform the crypto market by successfully asserting the SEC’s jurisdiction over the industry which for years has argued that tokens do not constitute securities and should not be regulated by the SEC.
Kevin O’Brien, a partner at Ford O’Brien Landy and a former federal prosecutor, said to Reuters, “The two cases are different, but overlap and point in the same direction: the SEC’s increasingly aggressive campaign to bring cryptocurrencies under the jurisdiction of the federal securities laws… If the SEC prevails in either case, the cryptocurrency industry will be transformed.”
Related: The Pros and Cons of Adding Cryptocurrency to Your Portfolio
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Market Recap Week of 5/30/2023 Through 6/02/2023