Its now-former CEO Sam Bankman-Fried faces civil charges from the SEC and the CFTC.Īmong all cryptocurrencies, Bitcoin surged in popularity, although they are still nowhere near as widely held as stocks.Ī recent research report estimated that 12% of the population owns crypto investments in the US. Cryptocurrencies are witnessing a rough ride since last year, with the collapse of FTX. Binance has suspended USD deposits while notifying customers that their banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13.Ĭoinbase and Binance join a list of crypto companies against which the SEC has taken action, including Kraken, Genesis, and Gemini. However, crypto firms are saying that by design, they are supposed to operate outside of the traditional financial system. Notably, Coinbase and Binance are both being accused of failing to register their exchanges with the SEC. Gensler believes that most cryptocurrencies are securities, therefore, the current law gives his agency the power to regulate them. dollar." SEC chief Gensler said he would do all it takes to tame a world he likens to "the Wild West." “We don’t need more digital currency … we already have digital currency - it’s called the U.S. Department of Justice, the report said.Since Gary Gensler became the chairperson of Wall Street's regulating body two years ago, his message to cryptocurrency firms has been consistent. Up against the world’s largest crypto exchange (Binance) and the largest publicly-traded crypto company (Coinbase), it’s likely Gensler is in for a fight. With the sector’s regulation still up in the air, other crypto firms could face their own enforcement actions from the SEC, the CFTC and the U.S. “The acceleration of legislative activity suggests a growing awareness of the need to establish a clear rule book for the digital asset ecosystem, although the topic remains contentious, making it hard to reach a bipartisan agreement,” Moody’s said.
regulatory framework.Īdditionally, earlier this year, the House Financial Services Committee proposed a model for stablecoin oversight. Unlike the approach taken by European policymakers, the proposed bill doesn’t attempt to create a specific regulatory regime for the crypto industry, it said, but instead seeks to define how crypto fits into the existing U.S. “These provisions are a significant shift in the regulatory landscape for digital assets in the U.S.,” Moody’s said. Commodity Futures Trading Commission (CFTC), create a process for transitioning certain tokens from SEC to CFTC oversight, and introduce an exemption from securities laws for certain assets. “This draft legislation aims to provide clarity, fill regulatory gaps, foster innovation and ensure consumer protection within the digital asset ecosystem,” the rating agency said.Īmong other things, the proposed bill would clearly define regulators’ responsibilities in the crypto space, expand the jurisdiction of the U.S. House Financial Services Committee and the House Committee on Agriculture released a discussion draft of a bill to establish a comprehensive regulatory framework for digital assets in the U.S. “If the SEC prevails, Coinbase and Binance will likely need to change their business practices, which could result in reduced revenue from activities that may not meet regulatory standards.”Īt the same time, Moody’s suggested the actions could be good for the crypto sector overall by pushing Congress to move ahead with proposed regulatory policy reforms that would provide greater clarity and certainty to firms in the space.įor instance, on June 2, the U.S. “The litigation will likely raise costs for Binance and Coinbase, including possible regulatory penalties and fines, and increased operational compliance and legal costs,” it said. These actions may prove costly for the individual companies, the rating agency said in a research note.
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