Crypto Tokens' Status as Securities or Commodities Is Key to SEC's Binance, Coinbase Suits: Bernstein |
Posted: June 8, 2023 |
The U.S. Securities and Exchange Commission's claims against cryptocurrency exchanges Binance and Coinbase (COIN) center on whether cryptocurrency tokens are securities or commodities, Bernstein said in a research paper released on Tuesday.
The SEC's legal action against Ripple, according to the article, will provide the first judicial clarity on the issue. Later this year, there may be a decision in that matter, which would have immediate implications for the sector. Federal securities laws allegedly were broken, and the agency announced on Monday that it was suing Binance, Binance founder and CEO Changpeng "CZ" Zhao, and the operating business for Binance.US. A day later, it sued competing exchange Coinbase for comparable reasons. Republican and Democratic political debates about cryptocurrency legislation have totally taken over the topic, according to Bernstein. According to experts Gautam Chhugani and Manas Agrawal, "the intent seems to be to build a functional framework for digital commodities and payments stablecoins - providing the Commodity Futures Trading Commission (CFTC) with more regulatory authority than the SEC." It was anticipated that the SEC would follow, citing securities violations and thereby implying that most tokens are securities, given that the CFTC had already sued Binance on the grounds of misconduct for luring American investors to its offshore derivatives platform. Despite being unfortunate, Bernstein claims that the United State regulatory action is not an "existential" threat. Following the incident, the price of both BTC and ETH increased by roughly 3%, showing that most of the money that had to leave the cryptocurrency market is already out and the bad news seems to have been fully factored in, according to the report.
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