The U.S. Securities and Exchange Commission (SEC) has decided it’s high noon in the Wild West of cryptocurrency exchanges. With the speed of a gunslinger, it filed lawsuits against both Coinbase and Binance, accusing these crypto titans of violating securities laws.
This legal blitzkrieg comes on the heels of SEC naming several crypto tokens as securities. The tokens in the hot seat include fan favorites like SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.
The legal duel with Coinbase has been brewing for some time. The SEC had already sent a Wells notice to the company, essentially a “Dear John” letter hinting at a future enforcement action. Coinbase didn’t take it lying down, and countered with its own lawsuit, accusing the SEC of stonewalling its request for new digital-asset regulations.
The SEC’s lawsuit posits that Coinbase has been playing a multi-hat trick, operating as a broker, exchange, and clearing agency. However, they’ve neglected to register with the SEC in any of these roles. This, the regulator argues, allows Coinbase to sidestep the disclosure rules that other securities market participants are subject to.
The Binance bombshell dropped just a day before the Coinbase conundrum, catching both the exchange and its co-founder, Changpeng Zhao, in its blast radius. Following these back-to-back legal salvoes, other exchanges have been put on high alert.