Home » Kraken, Coinbase, Binance US… Resistance to SEC crusade is getting organized

Kraken, Coinbase, Binance US… Resistance to SEC crusade is getting organized

by Tim

The US Securities and Exchange Commission (SEC) is reportedly on a crusade against US cryptocurrency exchange platforms, particularly staking services. What’s going on in the crypto ecosystem and why is the community so worried about it

The SEC’s crusade against cryptocurrency exchange platforms

We told you about it last summer: the SEC seemed to be investigating all cryptocurrency exchange platforms in the United States, in order to hunt for irregularities. As a reminder, the US financial watchdog is a scarecrow within the community, given its ability to severely curb – or even bring down – crypto projects deemed not to comply with its strict rules.

Since then, the platforms’ concerns have become apparent, especially in recent weeks. A few days ago, Brian Armstrong, Coinbase’s CEO, warned of a desire by the SEC to get rid of staking. Since then, Kraken has been forced to close its staking service in the United States, and a few days ago we learned that the platform would have to pay a fine of 30 million dollars.

Kraken is not the only platform in the SEC’s crosshairs. The SEC filed a complaint against Gemini and Genesis a month ago… And this morning it was learned that it would now turn its attention to Paxos, the issuer of the stablecoin BUSD from Binance.

Resistance is getting organized

Hard knocks are coming for the ecosystem, which is already coming out of an eventful 2022 with the fall of the Terra ecosystem and the FTX empire. This is of course no stranger to the SEC’s newfound motivation, pushing its advantage at a time when confidence in cryptocurrency projects is at an all-time low.

In the face of this, the major exchange platforms have made their concerns known, and in the case of Kraken, a certain disgust, if Jesse Powell, the exchange’s founder, is to be believed:

You mean all I had to do was fill out a form on a site and explain to people that staking rewards come from staking? I should have watched that video before I had to pay a $30 million fine. “

On the Coinbase side, they are also preparing for battle. A particularly angry Brian Armstrong explained that the company was ready to go to court to defend its right to offer staking services.

Binance is also taking action. The company has been working hard to restore confidence in the ecosystem since the fall of FTX – promoting its services in the process. Faced with the SEC, the cryptocurrency giant is reportedly organising a consortium. The idea is to bring together the heavyweights of the ecosystem in order to organize themselves in the face of increasingly enterprising regulators.

The SEC is increasing the pressure

SEC Chairman Gary Gensler also reaffirmed his commitment this weekend, with particularly strong words to describe the institution’s latest initiatives:

We use all the tools at our disposal. We talk directly to the market participants. […]The casinos that users invest in have to comply, and separate their products that are mixed. [We are here to protect the general public.

The conflict has been brewing for some time, it has now erupted. It is likely that one (or more) companies will take their views to court, to set a precedent. And the SEC is not always the winner in this game, if the ongoing proceedings with Ripple (XRP) are anything to go by. The coming year should therefore be one of legal clarification.

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