On June 5th, the SEC accused Binance, the world's largest cryptocurrency exchange, and its CEO, Changpeng Zhao, of manipulating funds, deceiving investors and regulators, and violating securities laws.
According to SCMP , Omid Malekan, an associate professor at Columbia University (USA), said the cryptocurrency market would "slowly die" if it followed the SEC's regulations under Chairman Gary Gensler.
In an interview with Bloomberg, Gensler shared that the SEC has been working with 10 states to file complaints against Coinbase. He views the SEC's efforts to regulate cryptocurrencies as one of the measures to protect investors and the integrity of the US market.
Coinbase was co-founded in 2012 by Brian Armstrong. The Coinbase CEO was not accused of wrongdoing in the SEC complaint. While Binance is the world's largest cryptocurrency exchange, Coinbase is the largest in the US, with over 150 different tokens traded. Coinbase's chief legal officer, Paul Grewal, has previously stated that tokens are not securities. Grewal said the SEC's reliance on an enforcement approach in the absence of clear regulations for the digital asset industry is harming the US economy and companies like Coinbase's competitiveness.
The SEC alleges that Coinbase operated as an exchange, broker-dealer, and clearinghouse without registering with the SEC.
A cryptocurrency may fall under SEC jurisdiction if investors purchase it to fund a company or project with the intention of making a profit. In its complaint, the SEC argues that many tokens offered on Coinbase are securities, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.
According to SCMP , the question of whether certain tokens are securities has plagued the cryptocurrency industry for years. In 2020, the SEC sued Ripple Labs Inc., arguing that its XRP token was a security and subject to SEC regulations.
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