SEC’s All-In Political Battle Over Crypto.
The Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase, setting up a high-stakes battle that will engage all three branches of the U.S. government in a competition for power. The outcome of this battle will determine whether the crypto industry will leave the U.S. for good and define the future of digital money. The SEC’s actions against Binance and Coinbase are revealing the agency’s extraordinary discretionary power. SEC Chairman Gary Gensler suggested in interviews following the announcements that he wants to destroy the crypto industry.
By suing Binance, an international company, and its high-profile CEO, Changpeng Zhao (“CZ”), the SEC has sought to demonstrate that its reach extends beyond U.S. borders. With the Coinbase case, the SEC is taking aim at a much wider set of players than just that one defendant. The actions directly go after the centralized finance (CeFi) system on which Binance’s and Coinbase’s custodial models are based and, indirectly, some of the main protocols on which decentralized finance (DeFi) depends.
However, the cases likely won’t be decided or settled for many years, leaving the Commission’s enforcement team stretched under a massive workload. The SEC’s hardline approach does not enjoy widespread support in other areas of the U.S. government. Other branches of government, such as Congress and the executive, have different ideas about the regulation of digital assets and may limit the SEC’s powers of interpretation of crypto within existing securities law.
This article discusses the potential impact of recent Supreme Court decisions on the Securities and Exchange Commission’s (SEC) ability to regulate cryptocurrencies. The article suggests that the conservative-leaning Supreme Court may be looking to limit the power of regulatory agencies, including the SEC. The outcome of this ongoing battle between the SEC and proponents of cryptocurrency is uncertain and could have far-reaching consequences for the future of the industry in the United States. The article suggests that if the SEC’s aggressive approach wins, it could drive developers and investors to more crypto-friendly jurisdictions. However, if crypto supporters are successful in pushing back against the SEC, it could create a path towards mainstream acceptance and adoption of cryptocurrencies. The article ultimately calls for a focus on education and a positive narrative to help transcend political divisions and promote the benefits of decentralized value exchange and data-sharing.
