US government redoubles its offensive against cryptocurrency platforms

The United States Securities and Exchange Commission (SEC) has just hit the table suing two trading platforms cryptocurrencies iconic: Binance, the largest crypto platform in the world, and Coinbase, the only one listed on the Wall Street, in its latest offensive against this sector, brought under scrutiny after the scandalous sinking of FTX last November.

The SEC, which for months has insisted on the need to strengthen regulation of the sector, sued Coinbase on Tuesday for operating as a stock exchange, stockbroker and clearinghouse to guarantee exchanges between investors, credit institutions and others. financial agents, without being registered.

“Since at least 2019, Coinbase has made billions of dollars illegally facilitating the buying and selling of crypto asset securities”the SEC maintains in the memo, in which it insists that Coinbase mixes traditional stock market services with those of a stockbroker without registering any of those functions.

After learning of the lawsuit, the platform’s shares sank more than a twenty%although they subsequently recovered and at 11:40 local time (15:40 GMT) a 13.88%

Yesterday, the SEC filed a total of 13 charges against Binance and its founder, Changpeng Zhao, accusing them of blatantly ignoring US stock market laws and making billions of dollars in exchange for putting into stock. “significant risk” the assets of its clients.

“Zhao and the Binance entities were not only aware of the rules, but consciously chose to evade them and put their clients and investors at risk, all in an attempt to maximize their own profits.”the president of the US regulator, Gary Gensler, said in a statement.

The SEC’s announcement comes just a day after Coinbase released a statement claiming that the United States “needs clear rules on cryptocurrency to protect consumers and America’s leadership.”

In fact, his legal advisor, Paul Grewall, is scheduled to testify today in front of a congressional committee on a legal draft to regulate the structure of the digital asset market.

For this crypto platform, digital currencies “they are solving real world problems” and it takes “a clear path to protect responsible innovation” and warns that the US is falling behind.

A tougher regulation also against celebrities

It is not the first time that Coinbase or other cryptocurrency platforms have been persecuted in the United States. In January, Coinbase agreed to pay the state of New York $100 million (half of it in fines) for violating regulations related to consumer protection, cybersecurity, and money laundering.

In fact, the State Prosecutor’s Office urged the authorities in May to tighten regulation to increase transparency, eliminate conflicts of interest and protect investors.

For New York Attorney General Letitia James, the absence of tougher regulations for this industry is what has made it prone to drastic market fluctuations, as well as being used to hide and promote criminal behavior and fraud.

In February, the SEC charged Terraform Labs and its CEO, Do Kwon, with fraud for the sudden crash of its cryptocurrencies TerraUSD and Luna in May 2022.

The SEC alleged that Singapore-based Terraform and its chief executive and shareholder, Kwon, a South Korean national who was arrested in March in Montenegro, orchestrated a multi-billion dollar fraud that partially took place in the US from 2018 to 2022, when TerraUSD crashed.

Likewise, the US regulator has persecuted celebrities and personalities who at some point have rented their image to promote crypto assets on social networks without disclosing that it was a sponsorship or the compensation they received, such as the famous Kim Kardashian, the former NBA player. Paul Pierce, the actress Lindsay Lohan or the singer Austin Mahone, the latter two for illegally promoting the crypto assets Tronix (TRX) and BitTorrent (BTT).

In addition, Justin Sun, owner of platforms Tron, BitTorrent and Rainberry, which paid celebrities, was charged with orchestrating a scheme to hide that the promotion was sponsored and manipulating the market to inflate TRX trading volume.

Source: EFE