Last month, the U.S. Securities and Exchange Commission filed lawsuits against Binance and Coinbase. The SEC alleges the crypto exchanges knowingly violated regulations. But, the situation is not so black and white…
The Security Vs. Commodity Debate
When digital currency was introduced, how to classify and govern it was not clearly defined. Accordingly, a hot debate arose around one big question…
ARE THESE TOKENS SECURITIES OR COMMODITIES?
It is hard for some to view cryptocurrency in the same asset class as real estate. Yet SEC leader, Gary Gensler, has asserted that crypto is a “security” and must follow the same regulations.
As a result, the two lawsuits against Coinbase and Binance are for trading unregistered securities since 2019. However, crypto trading services argue that these assets should be viewed as commodities.
A spokesperson for the Kraken exchange said to Reuters:
“WE DO NOT LIST SECURITIES. FOR EVERY ASSET WE LIST, OUR TEAMS CONDUCT THOROUGH RISK AND SECURITY EVALUATIONS WHICH INCLUDE A COMPREHENSIVE LEGAL AND COMPLIANCE PROCESS. WE WILL CONTINUE TO CLOSELY MONITOR THIS CASE AND OTHERS FOR PRECEDENTIAL RULINGS.”
Even though the SEC’s case will take years, it will have an impact on the future of crypto in the U.S. But how?
What SEC Regulations Mean for Crypto Trading in the U.S.
It is clear that the SEC is cracking down on crypto regulation in an attempt to protect investors. Nonetheless, these tighter restrictions may drive trade out of the United States completely…
Bernstein analysts estimate that over 90% of digital finance trading is already done outside of the U.S.
Definitely, something to consider before you buy that gorilla NFT.
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