{"id":1246475,"date":"2023-06-13T08:00:29","date_gmt":"2023-06-13T02:30:29","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1246475"},"modified":"2023-06-13T13:47:13","modified_gmt":"2023-06-13T08:17:13","slug":"us-govt-unleashes-war-against-crypto-companies-two-major-lawsuits-filed-by-sec-that-can-alter-the-future-of-crypto","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/us-govt-unleashes-war-against-crypto-companies-two-major-lawsuits-filed-by-sec-that-can-alter-the-future-of-crypto\/","title":{"rendered":"US Govt Unleashes War Against Crypto Companies: Two Major Lawsuits Filed By SEC That Can Alter The Future Of Crypto"},"content":{"rendered":"\n

The US market regulator the Securities and Exchange Commission (SEC)<\/a> filed two lawsuits this week that could potentially determine the future of cryptocurrency.<\/p>\n\n\n\n

\"US<\/figure>\n\n\n\n

Lawsuits Against Cryptocurrency<\/strong><\/p>\n\n\n\n

On June 5, the first lawsuit, which was filed on Binance.com, the world’s largest crypto exchange, related entities and founder Changpeng Zhao were the target. <\/p>\n\n\n\n

It’s very next day, which is the regulator’s 89th birthday, the SEC filed its second suit, now against Coinbase, another large exchange.<\/p>\n\n\n\n

Pouring more light on the subject, the SEC chair Gary Gensler said, “There is nothing about the crypto securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws,” in a speech just days later on Thursday.<\/p>\n\n\n\n

Further added that crypto exchanges and promoters have long been aware of the rules of the road for trading in cryptos — through SEC orders and enforcement actions — but they have chosen to ignore them or dismiss as they “may have made a calculated economic decision to take the risk of enforcement as the cost of doing business”.<\/p>\n\n\n\n

Rules Can’t Be Ignored<\/strong><\/p>\n\n\n\n

While talking about the lawsuit against Coinbase, the head of the SEC’s enforcement division, Gurbir S. Grewal said, “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great.”<\/p>\n\n\n\n

Interestingly, crypto had started out with nothing in 2009-10, is now an estimated to be a $1 trillion business, operating mostly in a regulatory gray zone.<\/p>\n\n\n\n

In its defense, Crypto exchanges have contended that their offerings, tokens are not like securities.<\/p>\n\n\n\n

So, their exchanges are unlike those that need to subject themselves to the usual rules.<\/p>\n\n\n\n

But, the US regulator disagrees. <\/p>\n\n\n\n

SEC has sought to assert its jurisdiction over the crypto exchanges arguing its offerings, tokens are securities and they must be registered with the regulator as others and so should their exchanges, under the leadership of Gensler, who was appointed by US President Joe Biden in 2021.<\/p>\n\n\n\n

Reaction From India<\/strong><\/p>\n\n\n\n

Mahin Gupta, Founder of Liminal, a wallet infrastructure & custody solutions platform<\/strong> reacted on this development: “The recent lawsuits filed by the SEC against Binance and Coinbase indicate a significant shift in regulatory approach towards the digital asset industry. Previously, the SEC had faced criticism for its perceived slow response in regulating the industry, which allowed certain malicious actors to operate without proper oversight, as exemplified by the FTX incident.\u00a0 This marks the beginning of a series of actions aimed at establishing tighter control over the industry. While these measures may ultimately contribute to legitimizing the web3 industry in the long run, it is important to acknowledge that such strong actions could potentially stifle innovation. Therefore, web3 firms need to proactively prepare themselves for heightened regulatory scrutiny.\u00a0 Web3 enterprises must prioritize compliance with all relevant laws and regulations. Additionally, they should establish robust internal controls to safeguard investor interests. Transparency regarding their operations is crucial, as is constructive engagement with regulators. By fostering collaboration between the digital asset industry and regulators, a balance can be struck between promoting innovation and ensuring investor protection. This collaborative approach will ultimately foster the long-term growth and success of the web3 industry.”<\/p>\n\n\n\n

130 Crypto Lawsuits<\/strong><\/p>\n\n\n\n

So far, it has brought about 130 crypto lawsuits, thus forcing smaller companies to shut down and others, who can afford the steep cost of litigation, to settlements.<\/p>\n\n\n\n

Coming to Bitcoin and Coinbase, they are looking at fines if judges side with the SEC or settlements. <\/p>\n\n\n\n

It is noteworthy here that these are civil suits and will not lead to imprisonment.<\/p>\n\n\n\n

However, the Department of Justice (DOJ) could jump in at any stage in these or other cases, then jail terms become a possibility.<\/p>\n\n\n\n

Earlier, during November 2022, Sam Bankman-Fried, founder and head of FTX crypto exchange that went bankrupt was among those who heard from the department of justice, and is now facing jail. <\/p>\n\n\n\n

Then he was accused of stealing money from FTX customers for lavish purchases for himself, donations to politicians and risky trade deals.<\/p>\n\n\n\n

Notably, FTX and such disasters await investors because of crypto exchange and their promoters’ defiance of rules that apply securities trade in general.<\/p>\n\n\n\n

SEC chair Gensler has said, “These types of misconduct and bankruptcies are more likely to happen in markets whose issuers and intermediaries fail to comply with foundational laws.”<\/p>\n\n\n\n

Adding, “Even when we might not find fraud or such blatant misconduct, investors need proper disclosure, segregation of their hard-earned assets, and confidence that they are not trading against the house.”<\/p>\n\n\n\n

In return, Binance has denied the SEC charges and said it will contest them in court, has been accused of, among other things, “wash trading” to boost trading volumes.<\/p>\n","protected":false},"excerpt":{"rendered":"

The US market regulator the Securities and Exchange Commission (SEC) filed two lawsuits this week that could potentially determine the future of cryptocurrency. Lawsuits Against Cryptocurrency On June 5, the first lawsuit, which was filed on Binance.com, the world’s largest crypto exchange, related entities and founder Changpeng Zhao were the target.  It’s very next day, […]<\/p>\n","protected":false},"author":27,"featured_media":1246483,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[1834,1833],"class_list":["post-1246475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-crypto-currencies","tag-sec"],"acf":[],"yoast_head":"\nUS Govt Unleashes War Against Crypto Companies: Two Major Lawsuits Filed By SEC That Can Alter The Future Of Crypto - Trak.in - Indian Business of Tech, Mobile & Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/us-govt-unleashes-war-against-crypto-companies-two-major-lawsuits-filed-by-sec-that-can-alter-the-future-of-crypto\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Govt Unleashes War Against Crypto Companies: Two Major Lawsuits Filed By SEC That Can Alter The Future Of Crypto - Trak.in - Indian Business of Tech, Mobile & Startups\" \/>\n<meta property=\"og:description\" content=\"The US market regulator the Securities and Exchange Commission (SEC) filed two lawsuits this week that could potentially determine the future of cryptocurrency. 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