As the SEC continues to intimidate the crypto industry, could stablecoins be the next target?
With its blockade of exchanges and cryptocurrencies, the SEC’s next stop could be stablecoins. The SEC, which had problems with stablecoins and their issuers in the previous processes, came to the fore again on June 15 with the depeg in stablecoins. In particular, the prospects for depegs in Tether (USDT), which accounts for 76 percent of the stablecoin market, could prompt a quick reaction from the SEC. What’s the latest on the SEC, crypto industry and stablecoin connections?
SEC’s Takeover
The SEC, which has increased its pressure on the crypto sector with the collapse of the FTX and Terra ecosystem, continues to strike fear, especially with its recent sanctions. Announcing that it filed a lawsuit against Coinbase, one of the leading names of crypto exchanges, on June 6, the SEC had a negative impact on many areas, especially cryptocurrencies and stock markets. The SEC, which filed a lawsuit against Binance a day later, blocked the market.
The SEC filed a lawsuit against Coinbase in its report Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie He stated that Infinity (AXS), Coti (COTI), BNB and BUSD are securities. After that, a serious selling wave was seen in altcoins. Also, the inclusion of stablecoin BUSD on the list may be a signal from the SEC for stablecoins.
Investors exiting both altcoins and crypto exchanges recently brought up the depeg issue in stablecoins. The SEC, which has long been open to the crypto industry, will not turn a blind eye to the problems in stablecoins. So it seems highly likely that the SEC’s next target will be stablecoins.
Signals Against Stablecoins
The aggressive rhetoric of SEC Chairman Gary Gensler about the crypto industry in the past has come to mind again with the chaos environment of the last days. Making an analogy with stablecoins and cryptocurrencies, Gensler said, “Stablecoins are like poker chips in a casino. “Cryptocurrencies are highly speculative assets. “Satoshi Nakamoto wanted to bring new technology and finance together. However, this cannot proceed without regulation.” he said.
The SEC, which opposes all kinds of dominance in the industry, has sued Binance and described the stablecoin of the exchange, BUSD, as a security. When we consider the lack of regulatory oversight of Tether (USDT), which accounts for 76 percent of stablecoins, it makes a possible SEC war possible. While the stablecoin issuer claims to have a US dollar backing each USDT token, there are concerns as to whether this is actually true.
The SEC sued Paxos, the stablecoin issuer behind the Pax Dollar (USDP) and BUSD tokens, and issued the Wells Notice. This notice is the one the regulator uses to notify companies of planned enforcement actions. As we evaluate the SEC’s recent aggressive moves, there are indications that stablecoins may be the next target.
War Preparation of Stablecoins
Although the remarkable data in USDT and the emerging Fud news have created volatility for the market, Tether CEO Paolo Ardoino’s strong stance and his efforts to maintain the trust he has given to investors continue to create a positive atmosphere about Tether. Ardoino is intimidating against manipulative attacks during this period when the market is going through a voluminous and pessimistic period.
Ardoiono stated that Tether is ready for any price action and will take the necessary steps. He also took a tough stance against investors who converted USDT to USDC, expressing that they were ready to pay back. In addition, Ardoiono had made such a statement in the past;
Today’s numbers show that people want access to financial freedom and will use it when that access is given to them. Tether tokens provide a safe haven for those who have no other access and allow them to maintain their purchasing power even as their currencies are devalued.
Bringing its trust in stablecoins to the agenda through Tether, Ardoino promises that Tether aims to protect market confidence by taking precautions against manipulative transactions and will take the steps that investors expect.
Jeremy Allaire, CEO and co-founder of USDC issuer Circle, responded on social media to the targeting of stablecoins and the depeg allegations made as of yesterday. Stating that there is nothing to worry about, Allaire stated that stablecoins have a critical share for the industry and should be protected.
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