According to staff from the office of Senator Cynthia Lummis, crypto exchanges will have no way out of the vast US crypto regulatory grid.
According to staff from the office of Senator Lummis, the U.S. Securities and Exchange Commission (SEC) is investigating Coinbase, the country’s largest exchange, and has also been keeping an eye on global giant Binance.
Before that, both Coinbase and Binance took steps to placate regulators. Accordingly, Binance has spun off a separate branch (Binance.US) with limited services for US customers.
However, this may not be enough for the SEC. Meanwhile, a more crypto-friendly regulator, the Commodity Futures Trading Commission (CFTC), is more likely to approach this space without relying on enforcement and lawsuits (as the SEC is doing).
As reported by Forbes on August 4, all U.S. crypto exchanges are in various stages of an investigation conducted by SEC employees.
However, crypto assets are yet to be officially classified as securities, so the SEC is technically operating beyond its jurisdiction.
Two bills were introduced recently to give the CFTC more rights over cryptocurrencies. Officials say there is less than a 50% chance of it being passed this year. The Lummis-Gillibrand Bill was filed on June 7, and the Digital Commodities Consumer Protection Act was announced this week.
According to a crypto exchange executive, many US exchanges have likely received Wells Notices from the SEC. They are used to officially notify companies when action is about to be taken against them. The unnamed executive also said these cases are separate from standard SEC procedures.
This week, Binance.US delisted AMP after the SEC deemed the cryptocurrency security. Overall, the battle for regulatory control over cryptocurrencies in the US is fierce and unlikely to end anytime soon. Not only that, it only has the effect of prolonging uncertainty for companies trying to comply.
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