A fresh brawl has emerged recently between the regulators and the crypto industry, and this time securities regulator U.S. SEC is planning to sue public-listed crypto firm Coinbase (NASDAQ: COIN). The SEC is planning for an enforcement regulation on Coinbase’s crypto lending business.
On Tuesday, September 7, Coinbase CEO Brian Armstrong took to Twitter expressing his dismay at the SEC action and noting that how it can harm the industry. In particular, the SEC seems to be having an issue with Coinbase offering yield returns on the USDC stablecoins.
Any major crackdown by the SEC on Coinbase can have far-reaching consequences on the entire crypto industry. Potentially, it can also trigger a major crypto market sell-off as the SEC extends its scrutiny on fiat-linked crypto stablecoins.
We have seen this happening back in 2018-2019 when regulators swept the market putting the overall crypto space under pressure for a long time. Speaking to Yahoo Finance on Wednesday, September 8, Celsius Network co-founder Alex Mashinsky said:
“I think we’re going through these murky waters right now and we need to get clarity and its going to take a little bit of time before we get the rules and we can start running faster.”
The crypto industry is certainly looking for more clarity on the matter. Especially, it wants to hear from the SEC as to how the regulator considers lending as security. This is yet another major rift initiated by the SEC after its long-going brawl with Ripple.
SEC’s Gary Gensler Gets Touch on Crypto
Often touted as the ‘crypto-friendly SEC chairman’, Gary Gensler has proved to be a tough nut to crack. Since his appointment as the SEC chairman in April 2021, Gensler has hinted at going tough on crypto.
The SEC chairman called the crypto industry “the wild west of our financial system” that “desperately needs rules of the road”. Gensler said that the SEC will step up efforts in scrutinizing firms offering products that seem like securities. He noted that they are closely watching the decentralized finance (DeFi) market. Speaking to Bloomberg, James Cox, a professor at Duke University School of Law said:
“The SEC is being aggressive for the first time in a long time. The SEC has been putting a lot of muscle into cryptocurrency. It’s a big, fast-growing market and a fertile area for abuses.”
Coinbase Receives Support from Crypto Backers
However, a lot of supporters of crypto have also come in support of Coinbase after the recent SEC news. Billionaire investor Mark Cuban asked Coinbase CEO Brian Armstrong to go on the offensive. Cuban wrote:
Brian, this is “Regulation via Litigation”. They aren’t capable of working through this themselves and are afraid of making mistakes in doing so. They leave it to the lawyers. Just the people you don’t want impacting the new technologies. You have to go on the offensive.
The worst case is that the SEC gets a judgement that cripples Crypto/DeFi and moves it even further offshore, killing possibly trillions of $$$ in economic benefit for the USA. We need exemptions like the internet got in the 90s.
Possibly, if the crypto firms unite for the good, they can potentially work with the SEC to bring regulatory clarity faster.
- ETH Whales Add Polygon (MATIC) Amid Prices Surge Of 60% In Last 7 Days
- Uniswap ($UNI) Surges 45% As Trading Fees Surpass Ethereum
- Ethereum Merge Delay? Developers Concerned Over Shadow Fork
- MINA Price Jumps By 20% Over This Announcement
- Bitcoin Mining Data Suggests More Price Dumps Ahead; Details
- This Bitcoin Bear Market Is Unlike Any Other, Here’s Why
- Here’s Why Shiba Inu Ecosystem Tokens’ Prices Are Shooting Up
- Goldman Sachs Likely to Raise $2 Billion To Acquire Celsius Assets, But Here’s the Catch
- Here’s Why SEC Chair Wants Single Rulebook For All Crypto Trading
- Huge Cardano Breakout Imminent After This Resistance Level?
- Avalanche Price Analysis: Will The AVAX Breakout Rally Reach $30?
- Sandbox Price Analysis: U-shaped Recovery could Lead SAND above $1.5
- NEAR Price Analysis: Reversal Within Channel could Sink NEAR Below $3
- Solana Price Analysis: SOL Price Rallying North With Eyes On $59
- XRP Price Analysis: Trendline Reversal Could Dump XRP Back to $0.3
- AXS Price Analysis: Rising AXS Price Aims To Reclaim $17.6 Mark
- Polygon Price Analysis: Can Trendline Breakout Lead MATIC to $0.75?
- ArbiSmart Price Analysis: RBIS Retests Multi-month Support; Buy this Dip?
- Waves Price Analysis: Emerging Pattern Threatens to Break $4.16 Support
- Apecoin Price Analysis: Trendline Fakeout Could Tumble APE by 25%