The U.S. Securities and Exchange Commission (SEC) issued guidelines for the crypto trading platforms. The advisory asked platforms to reflect digital assets they hold for users on their balance sheets at fair value. John Deaton, Lawyer for XRP holders in the Ripple Vs SEC lawsuit, predicted that now the commission will be filing cases against exchanges.
New lawsuit coming against crypto platforms?
The SEC in the advisory has highlighted the technological, legal, and regulatory risks linked to protecting crypto assets. The release cites an October 2020 report which includes the amount of digital assets stolen from crypto trading platforms in 2018. However, the commission says that these risks are not new and the staff has reviewed the financial statements of some organisations.
Meanwhile, XRP lawyer Deaton has sensed one or more upcoming lawsuits against crypto exchanges by the end by the end of the summer.
It is interesting to note that, the SEC said that they have refused many pleas over the years to provide regulatory guidance over the crypto assets. The release also mentions that “responsibility for the lack of legal and regulatory clarity lies at our doorstep.”
Fresh guidelines amid recent crypto hacks
According to the Wall Street Journal, these guidelines are a reflection of Commission Chairman Gary Gensler’s warning. Earlier, he mentioned Coinbase and cautioned that users who buy crypto on the platform are eventually making unsecured loans to the company.
The guideline has come amid the recent hacks and crypto theft. Recently, Axie Infinity lost over $615 million in a hack overtaking the highest $611 million theft of Poly Network in August 2021. Going by the new rules, any digital assets owned by the investors will be accounted for as an asset by the platforms.
The changes will largely affect the balance sheets of companies. As per the Wall Street Journal, Coinbase showed only $21.3 billion of assets and liabilities on its balance sheet while it held $278 billion of digital assets by the end of 2021.
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