For years, US financial regulators couldn’t agree on what to do about cryptocurrency. They wanted to do something, but couldn’t agree on what crypto was – a security, like a stock or bond, or a commodity, like a raw material or agricultural product, or neither? – and which agency would have jurisdiction.
This week, Gary Gensler, a longtime critic of crypto and the chair of the US Securities and Exchange Commission (SEC), appears to have found the answer – by launching a crackdown on crypto exchanges, the platforms on which investors buy and sell digital currencies.
The effort to establish clarity came in the form of back-to-back lawsuits. The first accused industry giant Binance of a range of securities violations, including mishandling customer funds and misleading investors and regulators. The second claimed that the biggest US crypto platform Coinbase of running an illegal exchange.
A 101-page lawsuit filed in federal court in New York on Tuesday alleges Coinbase skirted SEC rules for years by letting users trade crypto tokens that were actually unregistered securities.