JPMorgan says SEC’s crypto crackdown means US lawmakers need to create regulations this year.

The U.S. Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase, highlighting the need for U.S. lawmakers to create a comprehensive framework for regulating the crypto industry and determining the relative responsibilities of the SEC versus the Commodity Futures Trading Commission (CFTC), according to a research report by JPMorgan released on Thursday.

The report explained that the SEC considers most cryptocurrencies to be securities, and therefore most crypto companies and trading should be under its supervision and comply with regulatory frameworks that are currently applied to other securities.

The report stated that this is not a straightforward legal case, and it is unclear which cryptocurrencies would be classified as securities. The SEC versus Ripple case is a reflection of this lack of legal clarity, according to the analysts led by Nikolaos Panigirtzoglou.

Last week, the SEC filed a lawsuit against Binance, Binance founder and CEO Changpeng “CZ” Zhao and the operating company for Binance.US, alleging violations of federal securities laws. A day later, it filed a similar lawsuit against rival exchange Coinbase (COIN).

JPMorgan said that these actions are creating more urgency for U.S. lawmakers to create a comprehensive regulatory framework by the end of this year.

Until this happens, crypto activity is likely to continue moving outside the U.S. and into decentralized entities, and crypto venture capital funding is also likely to remain subdued, the bank said.

If the SEC’s stance is confirmed by lawmakers, Coinbase, Binance.US and other U.S. exchanges would have to register as brokers, and most cryptocurrencies would be treated as securities, according to the note. While this could be more onerous and costly for the industry, it would bring some positives, such as properly regulated crypto markets, more transparency and investor protection.

The bank said that the SEC’s actions last week have created uncertainty about a number of other layer 1 tokens that are alleged to be securities, creating an advantage for bitcoin (BTC) and ether (ETH).

Read more: Crypto Tokens’ Status as Securities or Commodities Is Key to SEC’s Binance, Coinbase Suits: Bernstein

Edited by Sheldon Reback.