The SEC has spent years saying it dislikes crypto assets of any kind, but it hasn’t explained why it dislikes them, it hasn’t explained why it thinks they’re a problem and it hasn’t even pretended to explain how it would regulate crypto assets in a way that it thinks would be more consistent with its regulatory mandate. The U.S. Securities and Exchange Commission (SEC) has finally taken action against two of the largest crypto companies in the world, Binance and Coinbase. This week’s one-two punch has revealed new information about the agency’s approach to crypto, and why it has been so aggressive. Journalists reached out to a number of legal authorities and crypto observers to get a better sense of what is likely to happen next with the cases and what they could mean for the future of the industry.
The SEC’s lawsuits could catalyze Congress to recognize that the SEC’s approach to regulation by enforcement is not working and comprehensive legislation is needed. The SEC’s assertions that certain crypto assets are securities are just assertions, and they are not yet supported by a judicial determination on security status.
The SEC’s cases against Binance and Coinbase could spur congressional action on crypto regulation, and the more wide-ranging accusations against Binance, damning if true, could capsize what is likely one of the most profitable businesses of the 21st century so far. Thinking long term, the future of crypto within the U.S. is likely to be determined by Congress rather than the courts.