Binance and Coinbase Show Knives Out for Crypto
Washington PostJun 06, 2023
On Tuesday, the US Securities and Exchange Commission (SEC) sued Coinbase, the country's largest crypto exchange, for allegedly "operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency."
In a lawsuit filed in the US District Court for the Southern District of New York, the SEC claimed that Coinbase earned billions of dollars by unlawfully providing a marketplace for securities and completing transactions for its customers since at least 2019.
US regulators have finally realized the risks the crypto ecosystem poses to financial stability and consumer protection, with the SEC filing lawsuits against Coinbase and Binance. This move will likely sweep away powerful offshore exchanges offering extremely risky derivatives bets with little oversight, to create a better, crypto-regulated environment.
The absence of fair, clear rules for the digital asset industry creates excessive red tape that dampens America's economic competitiveness. Given that the SEC allowed Coinbase to go public in 2021, it's hard to determine the grounds for this lawsuit. The federal agency should create a transparent and equitable, framework rather than relying on a reactive, litigious strategy of regulation.
There's a 15% chance that Coinbase will file for bankruptcy protection before 2024, according to the Metaculus prediction community.