The regulatory action against the two biggest crypto exchanges has made it clear: the SEC, led by Chairman Gary Gensler, wants to end the crypto industry. The agency’s scare tactics may succeed in the US, but it struggles with the overall market.
The US SEC made its position against crypto known this week when it launched severe regulatory action against Binance, the world’s largest crypto exchange, and Coinbase, the largest crypto exchange by trade volume in the US. Leading the agency in its crusade is Gary Gensler, a man who has made his views of the industry no secret.
Following the SEC’s lawsuits against the exchanges, the market was expected to react severely, and the prices would plunge. However, Bitcoin and the broader market held steady throughout the week.
However, Gensler’s SEC made allegations in its suit against Binance, which labelled several popular cryptocurrencies unregistered securities. The SEC listed Polygon (MATIC), Cardano (ADA), Solana (SOL), Cosmos Hub (ATOM), Filecoin (FIL), Decentraland (MANA), Algorand (ALGO), The Sandbox (SAND), Coti (COTI), and Axie Infinity (AXS).
The agency’s naming of these tokens as securities did, however, cause panic in the market and spurred trading platform Robinhood to delist MATIC, SOL, and ADA from its platform come June 27.
Alt-Market Reacts to Robinhood Delisting
Although the market did not react as much as expected during the week, it did see a dramatic plunge on Saturday.
Undoubtedly fuelled by Robinhood’s delisting announcement, the crypto alt market saw significant declines. ADA was trading down by as much as 25%, while SOL and MATIC also saw double-digit losses. Amid the dire market conditions, Singapore-based crypto exchange Crypto.com announced it would suspend its institutional exchange service for US customers.
Compared to the broader market, Bitcoin was only trading down only 5% to its lowest level since March and was trading hands at around $25,000.
The market appeared to recover ever so slightly by Sunday morning, but the “bloodbath” continues.
Did Gary Gensler Offer His Services to Binance?
A surprising report emerged this week amid the chaos when CNBC revealed that Gensler had a series of conversations with Binance officials and its CEO, Changpeng Zhao. Binance lawyers allege that Gensler offered his services as an advisor to the exchange in 2019.
Although merely reports at the moment, the allegations undoubtedly damage Gensler and call into question his intentions as Chairman of the securities regulator.
The Crypto Industry Will Prevail
The SEC and all its might may continue to slap the industry with a barrage of claims, but it seems unlikely that it will manage to bring the industry down. The agency is certainly doing substantial damage to the US crypto industry, but the crypto market at large will not be taken down.
In light of the recent events in the crypto industry – recall the spectacular failures of FTX, we cannot live under the illusion that the industry can go on unregulated.
However, the US’s approach to this is simply wrong and unproductive and achieves little bar driving crypto off US shores and into the hands of territories which welcome it with open arms.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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