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SEC Chair Gensler asserts, “we don’t need more digital currency” as agency sues Coinbase and Binance

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TL;DR

  • SEC Chair Gary Gensler asserts there is no need for more digital currency amidst lawsuits against Binance and Coinbase for allegedly operating unregistered securities exchanges.
  • Gensler defends the SEC’s legal position and draws parallels between the cases against Binance’s CEO and FTX founder, highlighting the importance of compliance with securities regulations.
  • The charges against Coinbase focus on violations of US securities laws, with the SEC alleging that the exchange operated as an unregistered national securities exchange, broker, and clearing agency.

In an interview with CNBC, Securities and Exchange Commission (SEC) Chair Gary Gensler responded to criticism by denying that his approach was confusing the crypto industry. This comes as the SEC filed lawsuits against major cryptocurrency exchanges Binance and Coinbase for allegedly operating unregistered securities exchanges. Gensler also drew parallels between the case against Binance’s CEO Changpeng “CZ” Zhao and the criminal case involving FTX founder Sam Bankman-Fried.

Gensler emphasized that the U.S. doesn’t require additional digital currencies, stating, “We already have digital currency; it’s called the U.S. dollar.” Also, he argued that throughout history, economies and the public have not needed more than one means of value transfer. The SEC’s lawsuits against Binance and Coinbase aim to demonstrate that the thousands of tokens traded on these platforms resemble investment contracts that should have been registered with the agency. Gensler stressed that if even one token is deemed a security, it should be properly registered.

The SEC’s allegations against Binance focus on its affiliate Sigma Chain, which is accused of manipulating volumes and compromising data. Gensler highlighted the similarities between this case and Sam Bankman-Fried, who currently faces charges, including fraud. While the suit against Binance does not allege fraud by CZ, it seeks civil penalties and a permanent ban on him from acting as an officer or director of any securities issuer.

Regulatory focus on Coinbase’s failures

Chair Gensler’s comments came after charges were brought against Coinbase by the SEC. During the CNBC interview, he highlighted the exchange’s failure to provide “critical protections” to investors, leading to alleged violations of several U.S. securities laws. The charges against Coinbase center on the exchange’s alleged operation as an unregistered national securities exchange, broker, and clearing agency, among other violations.

The issue of regulation in the digital asset industry has long been a topic of discussion. As the industry continues to grow rapidly, there is a growing need for clear and defined regulations to govern exchanges and crypto companies. The lawsuits against Coinbase and Binance reflect the SEC’s efforts to enforce existing securities laws and ensure investor protection.

With these high-profile cases, SEC Chair Gensler is making it clear that regulatory compliance is necessary for intermediaries in the crypto space. The charges against Coinbase and Binance highlight the importance of adhering to securities regulations and providing essential protections for investors. As the legal proceedings unfold, the outcomes of these cases will have significant implications for the broader crypto industry, shaping the future of digital asset exchanges and their compliance with regulatory standards.

Disclaimer. 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 decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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