The SEC alleges companies affiliated with Binance trade against Binance customers. This isn't a business model that exists in traditional finance, where there are voluminous rules to protect investors from systemic risks and conflicts of interest. Think of Binance as a crypto Amazon: a one-stop shop for everything. It's a model that doesn't exist in traditional finance. It would mean that virtual currencies and other digital assets could be regulated just like stocks.īinance has become massive in the world of crypto, becoming a one-stop shop for everything. The outcome of the SEC's string of lawsuits against crypto companies could have enormous consequences for the industry. By design, it is supposed to operate outside the rules of traditional finance.
That assertion goes against the very essence of crypto. With enforcement actions against companies like Binance and Coinbase, it is arguing most cryptocurrencies are securities - like stocks, not commodities, and therefore, fall under the regulator's purview. The SEC under Gensler intends to change that. Today, there are thousands of digital currencies, and crypto companies are offering all kinds of services, including banking, while operating in a regulatory gray area. Over the past few years, the SEC has grown alarmed at how quickly the crypto industry has developed. Under Chair Gary Gensler, the SEC has gone hard after crypto companies as it seeks to get the industry to follow its rules.
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