It’s not great to be a crypto trader right now considering the mounting legal woes of the few available exchanges on the market. Both Coinbase and Binance are under attack by the SEC who’s continuing its crypto tirade in the worst possible ways. Coinbase has been entwined in legal troubles with the SEC for a while now, and it looks like Gary Gensler’s next target is Binance.
But, Binance’s CEO was smart to anticipate such a move, applying for a license in Dubai. The company has finally obtained it. It comes in the right time as the crypto market is facing regulatory troubles in both the USA and Europe.
Coinbase in a Tight Spot
The US Securities and Exchange Commission has officially asked Coinbase to stop trading anything other than Bitcoin. This shows the agency’s commitment to assert regulatory authority over a big portion of the market. According to Coinbase representatives, the SEC did this right before launching legal action against the cryptocurrency exchange which is listed on NASDAQ.
This time, the SEC identified 13 lightly trader cryptocurrencies on the platform as securities. However, it has previously asked Coinbase to delist around 200 tokens it offers, which means the SEC is moving for wider authority over the crypto industry.
Brian Armstrong, Coinbase’s CEO, says that the SEC came in and said they believe every asset other than Bitcoin is a security, which certainly isn’t the case. But, the SEC and its chairman are obsessed over that claim which is really hurting the crypto industry. Of course, Coinbase pushed back by asking how they came to that conclusion, but they didn’t receive an explanation. Not that the SEC didn’t have one – they just didn’t want to explain it, which is absurd.
If Coinbase agreed, it would leave most of the crypto market in the USA operating outside the law. So, the exchange took things to court and we’re waiting for the results.
Binance Takes a Hit As Well
It’s not just Coinbase that’s in trouble. Its rival Binance was considered the premier crypto exchange all over the world for years, until the CFTC and the SEC took hits at it one after another. Binance’s CEO Changpeng Zhao anticipated such a move, and started looking for solutions amid international pullback and regulatory troubles.
A couple of months back, the company applied for a license in Dubai, and has finally received it. It will operate under Binance FZE. It may be just what the doctor ordered, as SEC’s legal action against Binance has resulted in a lot of trouble for the company. Some high-profile executives quit their jobs, and Binance also laid off around 1,000 in staff. It has pulled back from Cyprus, Netherlands, Germany, and faces criminal charges in the USA, so Dubai might be the last straw.
It all depends on what the SEC does with its Coinbase case and if it ever tells us what securities truly are. We’re hoping for a positive solution, as anything other than that will greatly hurt the crypto market.