Key Takeaways:
- The US Securities& Exchange Commission has filed cases against crypto exchanges Binance and Coinbase
- Crypto industry insiders have alleged the crackdown could be an inside job from Wall Street
- Of late, there has been an increased institutional interest into cryptocurrencies and Bitcoin ETFs
YEREVAN (CoinChapter.com) — The US Securities and Exchange Commission (SEC) recently made headlines after filing lawsuits against major cryptocurrency exchanges Binance and Coinbase. However, industry observers now allege these crackdowns could potentially be an inside job from the Wall Street and raise concerns about the integrity of these platforms.
Earlier this month, SEC initiated a lawsuit against Binance and its CEO, Changpeng Zhao (CZ), accusing them of violating US securities laws.
“This case arises from the Defendants’ blatant disregard of the federal securities laws and the investor and market protections these laws provide. In so doing, Defendants have enriched themselves by billions of US dollars while placing investors’ assets at significant risk,”
the financial watchdog claimed.
The SEC also alleged that Binance unlawfully encouraged US investors to engage in buying, selling, and trading crypto asset securities through unregistered trading platforms. This behavior allegedly involved numerous unregistered offers and sales of crypto asset securities and other investment schemes.
Furthermore, regulators asserted that Binance deceived investors by misrepresenting the controls implemented on Binance’s US platform.
Meanwhile, the SEC’s clampdown against another major crypto exchange, Coinbase, has also caused concerns in the industry.
SEC Chairman Gary Gensler alleged that the crypto exchange violated laws by offering crypto asset securities to its customers without registering them first with the watchdog.
“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions…. Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections,”
the SEC Chief said.
SEC Crackdown on Binance and Coinbase an Inside Job
The cryptocurrency community has responded to the SEC lawsuits with mixed reactions. Some argue that the regulatory body’s actions are necessary for the maturation of the market. Meanwhile, others express concerns about potential overreach and its impact on innovation within the industry.
Some market watchers have pointed out, that the timing of the crackdown raises suspicions. It came just before big institutional investors took a sudden interest in cryptocurrencies.
Preston Pysh, one of the co-founders of the Investor’s Podcast, suggested that the recent filings for Bitcoin ETFs and spot exchanges by prominent Wall Street players like Blackrock, Fidelity, Citadel, Schwab, and Deutsche Bank indicate a possible coordinated effort.
“How can’t you think this entire past year was a giant inside job coordinated between the Wall Street parasites and government regulators so they could catch-up,”
he wrote on Twitter.
Regardless of what one thinks about Binance or Coinbase, the timing is suspicious. Why is Wall Street, which has long shunned the industry, suddenly so eager to grab a share?
Will Clemente, the co-founder of Reflexivity Research, also echoed similar sentiments.
“Surely Blackrock, Fidelity, Citadel, Schwab, etc. are all trying to get a piece of Bitcoin/crypto because they think that it’s a ponzi scheme that’s worthless because it has no intrinsic value and is only used for money laundering, right?”
he asked, sarcastically.
It seems like the Wall Street players are getting cold feet seeing others lead the industry. A crackdown could potentially ensure that they still manage to get in on the game, even if late.
So was the crackdown on Binance and Coinbase an insider job? Time will show.
Related: Binance Nigeria Limited Is A Scam Company, CEO Changpeng Zhao Warns After SEC Clampdown
