CRYPTO Crackdown deepens in the US

SEC chairman Gary Gensler has made it clear that he’s going to play the role of sheriff in the Wild West that is the crypto industry, and after last week’s flurry of action from the agency, another regulator is following his agency’s lead.

On Monday, the Commodities Futures and Trading Commission filed a complaint in federal court alleging that Binance violated trading rules.

The filing also named Binance CEO Changpeng Zhao, as well as former chief compliance officer Samuel Lim, and said the pair solicited US customers — especially “lucrative and commercially important ‘VIP'” customers — while ignoring laws.

Now, the CFTC is requesting the court place monetary costs onto the exchange, as well as trading and registration bans.

All this comes just days after the SEC charged a spate of high-profile individuals for fraud and crypto market manipulation.

The regulator named Justin Son of Tron, BitTorrent, and Rainberry, and also called out eight celebrities for illegally touting a token without making proper disclosures.

Lindsay Lohan, influencer Jake Paul, and rappers Lil Yachty and Soulja Boy were among those the SEC named.

The SEC said it’s “neutral” about the technology at hand, but that it’s “anything but neutral when it comes to investor protection.”

“As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities,” the SEC said.

“At the same time, Sun paid celebrities with millions of social media followers to tout those very securities, while specifically directing that they not disclose their compensation.”

Last week, too, crypto giant Coinbase said it received a Wells notice from the SEC, which means the regulator is looking into the company’s practices.

Coinbase’s legal chief said the company was “prepared for this disappointing development” after the SEC said it identified potential violations of securities law.

“The US crypto regulatory environment needs more guidance, not more enforcement,” Coinbase said in a statement responding to the notice. “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead.”

Gary Gensler at one time actually taught crypto and blockchain classes at MIT, leading many in the space to believe he’d be an ally. That assumption hasn’t quite been proven so far in his tenure.

At the end of 2021, Gensler shot down proposals for spot bitcoin ETFs, and he’s spoken critically of similar digital asset ventures since then.

The SEC warned separately on Thursday that investors are exposing themselves to extreme risk by getting involved in crypto, and doing so could lead to significant losses. That comes months after the total crypto market value saw about $2 trillion erased in a brutal plunge in token prices.

The SEC also warned that the platforms investors use to get involved in crypto aren’t quite airtight, in the regulator’s view.

Here’s how the SEC put it:

“None of the major crypto asset entities is registered with the SEC as a broker-dealer, exchange, or investment adviser — so investors may not get the protections afforded by the rules applicable to these entities.”

Subscribe to our newsletter!

Follow this link to join our telegram channel -

We are social

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow by Email