FILE - The seal of the U.S. Securities and Exchange Commission at SEC headquarters, June 19, 2015, in Washington. Two lawsuits filed by the U.S. Securities and Exchange Commission against the world’s biggest cryptocurrency exchanges, Binance and Coinbase, have reopened tensions between the government and a volatile industry that has been marred by scandals and market meltdowns. First came the crypto winter, then the alleged fraud wrought by FTX founder Sam Bankman-Fried, and now the lawsuits.
The lawsuits are the latest in an ongoing tussle between government officials who describe the crypto industry as the “ Wild West,” and creators of digital assets who seek to legitimize cryptocurrency as a currency of the future. What results from the legal battle could greatly diminish the growth of the crypto industry or, alternatively, restrict the scope of the SEC's regulatory authority.
Treasury Secretary Janet Yellen told CNBC Wednesday that she's “very supportive” of the SEC using the tools it has to protect consumers and investors. Crypto lobbyists now believe that those laws are more urgently needed to stop the SEC from moving forward with its lawsuits. New legislation would grant digital-asset issuers an exemption from securities laws if they meet certain conditions and would exclude digital commodities and payment stablecoins from the definition of a security under the securities laws, among many other provisions.