Two US senators argue that the SEC’s latest lawsuit against Coinbase has hurt the market and investors. Coinbase CEO Brian Armstrong also accused the SEC and Chairman Gary Gensler of their contradictory decisions.
Senator Lummis says SEC’s approach to Coinbase hurts investors
In her June 6 statement, Senator Cynthia Lummis stated that the SEC’s approach to regulation by enforcement is hurting consumers. Lummis points out that the financial regulator has failed to provide a favorable regulatory environment that would allow cryptocurrency exchanges to register. She also cited that she failed to provide “adequate legal guidance on what distinguishes security from a commodity.”
According to Senator Lummis, “True consumer protection is to create a solid legal framework that exchanges can adapt to. Rather, it is not pushing the industry into the high seas or into the shadows.”
My statement on the SEC suing Coinbase, inc. https://t.co/5KNEM0IPSV pic.twitter.com/EgRIxrIcjj
— Senator Cynthia Lummis (@SenLummis) June 6, 2023
On the other hand, Senator Bill Hagerty said that the SEC weaponized its role to kill the industry. According to the senator, the financial regulator’s refusal to allow Coinbase to register is untenable given the Commission’s approval of the IPO. Coinbase went public in 2021 with the permission of the SEC. Exchange CEO Brian Armstrong draws attention to the contradiction on this point in his latest statements.
Coinbase CEO says his exchange has proven its transparency with an IPO
Armstrong said on CNBC screens recently that they have a long history of ‘transparency’ with the SEC. According to their statement, “The SEC allowed us to be a public company. So it’s not great for a regulator to come back and say we actually changed our minds.”
The SEC claims that Coinbase has unregistered trading with 13 altcoins such as Solana and Polygon. Coinbase’s lawsuit came the day after Binance’s lawsuit on June 5. Industry experts are looking for other reasons behind the US regulator’s latest move.
Hong Kong lawyer says SEC actions will affect other countries
Hong Kong-licensed attorney Gilbert NG says the SEC’s latest move against Binance will cause difficulties in other jurisdictions as well. NG stressed that this approach will affect Hong Kong’s licensing procedures. The lawyer also observed that the US regulator approaches crypto firms Binance and Tether (USDT) differently.
Regulatory differences between countries
A significant disparity between the US and Hong Kong becomes evident in the definition of securities. With the recent SEC lawsuits, the number of cryptocurrencies accepted as securities in the US has reached 61. On the other hand, the same definitions and regulations do not apply in Hong Kong. Hong Kong currently restricts the purchase of security tokens to professional investors only to restrict access to individual investors.
However, as of June 1, Hong Kong has allowed crypto companies and exchanges to apply for licenses. In addition, under the assurance of the Hong Kong Securities and Futures Commission, individual investors are allowed to buy and sell leading cryptocurrencies such as Bitcoin and Ethereum.
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