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Can the SEC ban crypto exchanges?

SEC

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TL;DR

  • Does SEC have the power to ban exchanges?
  • The agency convicts two in the ongoing FTX case
  • The agency plans to go after exchanges

The United States Securities Exchange Commission is looking into the possibility of suspending the activities of centralized crypto exchanges. According to reports, the agency is presently digging into the likelihood of sticking a knife into the heart of the crypto sector. One trigger is the recent argument in the case against FTX and its CEO, Sam Bankman Fried. Last Wednesday, two more conspirators were apprehended in the ongoing battle with the exchange and its CEO.

The agency convicts two in the ongoing FTX case

According to reports, the two individuals were the former CEO of Alameda Research, Caroline Ellison, and a co-founder at the company Gary Wang. Asides from the fact that the regulator reported that Wang and Ellison are now cooperating with them to reveal inside secrets, the agency is likely going after most digital assets.

This move came after the agency battled out a lawsuit against the LBRY platform, which it won. However, Wang and Ellison are still docked for their involvement in the price manipulation of FTT tokens and the sale of what the agency termed ‘unregistered securities.’ The latest offense concerns others that the agency had filed in the past, with some being more successful than others.

SEC plans to go after exchanges

The complaint by the regulator shows that the body sees the in-house token as security regardless of how it was made available to the public. In his assessment of the report, SEC boss Gary Gensler also doubled down on the asset being a security that was much more important to FTX. Meanwhile, on a grander scale, there should be a difference between labeling an asset a security because it is and labeling it one because the company is in deep waters.

This change could signal a bad turn for the agency which has been trying to pin down regulation in that aspect for a long time. Should the court agree with the agency about its postulation, it won’t be just the company offering such tokens that would face the consequences. This way, it could go after middlemen like Coinbase and other central exchanges providing access to these tokens to users. A lawyer specializing in the crypto field mentioned that it looks like the agency has reversed its pursuit of securities. Instead of going after companies responsible for the tokens, they want to cut things in the middle by gutting exchanges.

The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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