US targets Binance and Coinbase – is the government ready to regulate crypto?

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.

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