US SEC sues Coinbase for breaking market rules - what's the implications for the entire cryptoverse?
Greetings to everyone on the InformationWar platform. It's a beautiful day and I'll like to share with us the issues and the ripple effects of the recent law suit against major crypto exchange platforms and how this could crumble another Centralized Exchange CEx company. Good morning!
Just few days ago CZ and the world largest crypto exchange company Binance was taken to court by the United States Security and Exchange Commission for some issued regarding to failure of the crypto Exchange company to comply with the commission's regulations. Another crypto exchange company known as Coinbase has been taken to court for not registering as an exchange company. The case filed as:
SEC v Coinbase Inc et al, US District Court, Southern District of New York, with suit No. 23-04738.
SEC issues with one of the biggest began in 2021 when the Security and Exchange Commission Boss told Coinbase that SEC will sue the crypto Exchange company if holders will earn interest for lending crypto assets.
In this particular case, SEC is sueing Coinbase for operating illegally because it failed to register itself as exchange company.
Both civil cases are part of SEC Chairman Gary Gensler’s push to assert jurisdiction over crypto markets, which he called a “wild West” of investing, and protect investors while shoring up their trust in capital markets.
“The crypto markets are undermining that trust, and I would say this: It undermines our overall capital markets,” Gensler told CNBC.
Crypto companies, including Coinbase, have said SEC rules are unclear and the regulator is overreaching by asserting oversight of their industry.
Ten US states led by California are also accusing Coinbase of securities law violations concerning its staking rewards programme.
Shares of Coinbase’s parent, Coinbase Global Inc, were down $6.42, or 10.9 percent, at $52.29 in afternoon trading after falling earlier as much as 20.9 percent.
Coinbase customers withdrew more than $57m within a couple of hours of the SEC filing, data firm Nansen said.
This withdrawals on its own will have a negative impact on the US giant cryptocurrencies exchange platform. $57m in hours is huge, what'll now happen to Coinbase if this withdrawals continues for days. It might lead to the collapse of the crypto Exchange platform.
For me and to those who are aware of SEC and FED'S plans against the entire cryptoverse, could relate this as one of the ways to frustrate the world largest emerging economy.
The SEC said Coinbase traded at least 13 crypto assets that are securities that should have been registered, including tokens such as Solana, Cardano and Polygon.
Kristin Smith, CEO of the Blockchain Association trade group, rejected Gensler’s efforts to oversee the industry.
“We’re confident the courts will prove Chair Gensler wrong in due time,” she said.