During the previous couple of years, the Securities and Exchange Commission (SEC) of the United States has advocated the enforcement of an all-inclusive regulatory policy. For this enforcement, It is focusing on digital assets-related entities such as Coinbase as well as the other fintech solutions such as Circle, Stellar, Ripple, and Ethereum.
The 2 chairmen of the SEC including the current Garry Gensler and the former Jay Clayton had been saying that each digital asset other than Bitcoin is labelled as a security. In this way, they consider that every crypto asset should get registered with the SEC. The securities regulator banks on a rapid settlement from the entities it accuses. For those platforms which stand against the SEC, there is a requirement for the best lawyers, resources, and patience for years to go through the legal proceedings.
The US regulator asserted that this enforcement would shield the investors but it remained ineffective in the case of FTX. Several regulatory mishaps caused the present crypto winter. SEC chair’s accusing the entire crypto industry is potentially a diversion from several conferences between him, the inner circle thereof, as well as Sam Bankman-Fried (the founder of FTX). It is additionally a distraction from how close the FTX founder got to approval before the fraud surfaced.
However, the episode of FTX was not the sole big event in the history of cryptocurrency. Another epic includes the lawsuit between Ripple and the SEC. The regulator labelled the crypto exchanges’ distributions of their local XRP token as unregistered security offerings. For recent 7 years, the SEC has been making arguments that the token is a security. Nevertheless, the crypto exchange retaliated and slashed the regulator’s theories. The platform also got support from 75,000 holders of XRP and other entities and legal experts.