SEC Crypto Enforcement Warning
Following the collapse of FTX last month, pressure is rising on US regulatory body the SEC to beef up enforcement of major crypto sector centres.
The failure of FTX focused attention on crypto exchanges, which serve as key hubs for individual investors and provide services such as digital-coin sales, financing, and asset storage. Despite spending more than six years studying various sector aspects, the Securities and Exchange Commission regulatory agency still needs to sue a major cryptocurrency exchange.
According to sources familiar with the topic and regulatory disclosures, the SEC is investigating exchanges such as Coinbase Global Inc. and the US operations of Binance and FTX. It has penalised or sued dozens of token creators over the past six years.
According to the SEC, several cryptocurrencies qualify as securities that should have traded under stock and bond laws. The firm's Chair Gary Gensler says that exchanges are breaching the law by selling unregistered securities and failing to follow standards that the NYSE and Nasdaq Stock Market follow.
Lawyers believe SEC crypto enforcement is not enough
Some attorneys argue that, despite such claims, regulatory enforcement measures have yet to go far enough as the sector has matured and ordinary people are committing their assets to crypto enterprises. Mr Gensler risks substantial criticism if he does not get things going", according to the report "former SEC enforcement attorney John Reed Stark.
It was a flaw in their plan not to pursue these entities, Mr. Stark explained.
The exchange kept trading six assets after the SEC sued a former Coinbase employee in July, alleging that the business sold seven improperly issued securities. They could have sued Coinbase, but they chose not to. According to a Coinbase spokesperson, the company thinks that none of the six digital currencies are securities.
Crypto exchanges believe SEC is using the wrong crypto enforcement laws
According to industry lawyers, the SEC crypto enforcement approach is exhibiting signs of wear and tear after years of the SEC utilising its enforcement arm to drive the industry into its supervision.
According to some industry attorneys, the activities of cryptocurrency exchanges are so unlike those of stock exchanges that compliance with their standards is impossible.
Author: Emmanuel Baiden
7 years experience within the financial services sector most notably in Sales, Trading, research and writing articles within the crypto space. I have a bachelor's degree in International Business and a Master's in Investment and Risk Finance . I am also an associate member of the Chartered Institute for Securities and Investment.