Crypto Startups Fighting SEC Gains Momentum
This week, Coinbase has joined the "resistance forces" in the face of Ripple, who decided to fight the US SEC. But which side will emerge victorious from this confrontation is still unknown.
On September 8, Coinbase CEO Brian Armstrong said in a tweet about the threat of a possible legal action from the SEC if the exchange launches Lend cryptocurrency savings accounts based on the USDC stablecoin offering customers 4% per annum. The reason was that the SEC saw signs of unregistered securities in the financial product.
An hour after Armstrong's tweet, there was a comment from Ripple chief Brad Garlinghouse. He greeted a colleague with the phrase, "Welcome to the party, buddy." Of course, all this was an irony for not the most fun events for the industry, a protracted lawsuit between the US Securities and Exchange Commission and the crypto startup Ripple, which has been going on for almost a year. It was caused by a claim against Ripple, which allegedly traded in unregistered securities for seven years. The opinion about going “on the offensive” against the SEC was also supported by the billionaire Mark Cuban and the head of the Kraken crypto exchange Jesse Powell.
Armstrong, in turn, accused the SEC of tactics of "intimidation behind closed doors" and hinted that the representatives of the US Securities and Exchange Commission should spread their attention to the entire cryptocurrency industry. By this, he most likely meant a complete disregard for dozens of scam projects in the field of decentralized finance and other obvious frauds taking place before the eyes of the department, while it concentrates most of its attention on the work of legal startups.
In addition to Ripple and Coinbase, the attention of the SEC was also attracted by one of the largest, and at the same time, one of the most transparent DEXs Uniswap. Her team announced that they are ready to cooperate with the commission, but the rest of the crypto community still does not understand what caused such a keen interest in DEX and suspicion of trading in unregistered securities. Some even joked that the SEC has “one diagnosis for everyone” when it comes to digital currencies.
Even more disheartening is that not so long ago, everyone was happy with the arrival of Gary Gensler, a new chairman interested in synergy between the work of the crypto industry and American justice. However, so far no visible results of this “synergy” have followed. According to experts, one of the reasons for this could be pressure on Gensler from the highest authorities in the person of the White House and the US Treasury, which perceive cryptocurrencies as a direct threat to the US dollar.
One way or another, large crypto startups are determined to seriously protect the right to carry out their activities in court, and their next steps may become decisive for the future of the entire industry. If Coinbase manages to enlist the support of key industry figures Powell, Cuban, Garlinghouse, and others, the SEC will likely have to back down. Or, at the very least, be prepared to confirm your concerns about trading in unregistered securities with something less ephemeral than “investor protection”.