Regulation
Legal battles intensify as cryptocurrency regulations stall!
The lack of clarity cryptocurrency regulation in the United States has created an endless war between the Securities and Exchange Commission (SEC) and established web3 companies led by Coinbase Global Inc. (NASDAQ: COIN) and Ripple Labs. While digital assets have been cited as a major issue in the upcoming U.S. general election, the current administration has not issued clear regulations on cryptocurrencies.
Many Web3 leaders criticize U.S. policymakers for lagging behind other major jurisdictions that have already established clear regulatory frameworks for digital assets. For example, the United Arab Emirates (UAE) has recently attracted numerous Web3 companies due to its transparent and favorable digital asset regulations. Similarly, the European Union is rapidly implementing the Markets in Crypto-Assets (MiCA) regulatory framework to promote sustainable Web3 and digital asset adoption.
With digital assets taking center stage in the upcoming US elections, will the current administration finally deliver on long-awaited cryptocurrency regulations? Read on to find out how this regulatory back-and-forth is impacting the future of cryptocurrency in the US.
SEC Goes After Web3 Companies
In recent years, the U.S. SEC has repeatedly accused Coinbase Global of operating as an unregistered exchange, broker, and clearinghouse. Despite failing to convince courts in several cases that digital assets violate securities laws, the SEC continues to challenge Web3 companies.
For example, a recent US court ruling found that Binance’s native coin did not violate securities laws under the Howey test. Additionally, last year’s Ripple lawsuit ended with a judge ruling that XRP sales on exchanges do not constitute investment contracts.
Coinbase vs SEC
Coinbase’s legal team, led by Chief Legal Officer Paul Grewal, has accused SEC Chairman Gary Gensler of being a double agent in his regulation of the digital asset industry. In recent court documents filed with Judge Katherine Polk Failla, Coinbase urged the court to compel the SEC and Gensler to produce relevant documents, including personal emails sent by Gensler before he took office as chairman and during his time as a professor at MIT.
Looking at the bigger picture
The mass adoption of digital assets by institutional investors and retail traders has increasingly attracted the attention of regulators. The recent approval of spot Bitcoin and Ethereum ETFs indicates high demand for these assets.
However, Web3 leaders are more likely to support lawmakers who promote the digital asset industry than to oppose them.
Read also: Coinbase Sues SEC, FDIC, Demands Transparency in Cryptocurrency Regulations
There is pressure for clear regulation of cryptocurrencies that fosters innovation, not stifles it. What do you think?