Binance Lawsuit Gives SEC Oversight Over $115 Billion Crypto

On Monday, June 5, the U.S. Securities and Exchange Commission (SEC) slapped a lawsuit against crypto exchange Binance over the violation of securities laws. With the recent move, the SEC has extended its oversight to crypto assets worth more than $115 billion.

In its Monday filing, the securities regulator cited over a dozen coins as assets that fall under its purview. Providers of these tokens as trading support will have to follow stricter protection rules. Additionally, other exchanges might shy away from offering support for these digital assets making them harder to trade in the open market.

In its filing, the US SEC named some of the top ten altcoins including Binance’s BNB, Polygon’s MATIC, Solana’s SOL, Cardano’s ADA, Filecoin’s FIL and Algorand’s ALGO. These when combined with other assets such as XRP put a total of $115 billion under the SEC purview.

SEC Chair Gary Gensler has said that most tokens are subject to securities laws for investor protection. However, this is the first time that the SEC is naming cryptocurrencies in particular, hinting at a tougher approach.

Industry Players Defend Binance

Soon after the SEC filed the lawsuit, Binance responded saying that its an attack against the entire industry. “While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously,” added Binance.

Other industry players have also come in support of Binance. Jeff Dorman, the chief investment officer at digital-asset specialist Arca told Bloomberg:

“Who actually gets hurt by this is Coinbase, Kraken and other US-based exchanges, who then have to make a decision on whether to delist, and US market makers, who potentially have to stop making markets on some of the tokens being listed as securities”.

Soon after the SEC lawsuit, the entire crypto market came crashing down. Bitcoin has shed some 4.5% of its price while other altcoins are down by 6-8%. However, Dorman predicts that the lawsuit won’t have a long-lasting impact on the crypto market noting that most cryptocurrencies are traded on off-shore exchanges.

Other exchanges like Coinbase and Kraken haven’t commented on the development. However, even they are fighting their own battles with the SEC. Previously, Coinbase noted that they wouldn’t delist tokens that the SEC deems as securities until the final court decision.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.