SEC’s Biggest Test: Coinbase, Binance Face Regulatory Clarity

• The SEC filed two major lawsuits and an application for a temporary restraining order over two days against Binance and Coinbase, respectively the world’s and the U.S.’s largest crypto exchanges.
• These cases may well define how cryptocurrencies are regulated in the U.S., at least until Congress passes some legislation (if that happens).
• Both Binance and Coinbase have issued a number of statements in response to the allegations, while also taking separate public stances on how they plan to defend themselves.

SEC Suing Binance & Coinbase

The U.S. Securities and Exchange Commission (SEC) has filed two major lawsuits this week against crypto exchanges Binance and Coinbase, respectively the world’s and the U.S.’s largest crypto exchanges. These cases may potentially define how cryptocurrencies are regulated in the U.S., at least until Congress passes some legislation (if that happens).

Response from Companies

In response to these allegations, both Binance and Coinbase have issued various statements with their respective executives weighing in on both TV and Twitter about it. While Coinbase CEO Brian Armstrong took to television solidifying its stance that it does not plan to shut down its staking service which is also facing heat from 10 state regulators, Binance US announced Wednesday it would halt trading on over 50 different token pairs, most of which were traded against the tether (USDT) stablecoin

Coinbase Defending Staking Service

Coinbase has been vocal about defending its staking service which is facing heat from 10 state regulators as it is classified as a security offering according to their laws due to consumers receiving rewards for providing liquidity to certain tokens through their staking services program such as Tezos or Compound Finance tokens . Brian Armstrong has been quite vocal about this being an overly restrictive approach when consumer protection should be focused on instead of discouraging people from participating in new financial technology such as blockchains or digital assets altogether .

Binance Halting Trading Pairs

Binance’s response was much more conservative with them choosing to halt trading on over 50 different token pairs that were traded against tether (USDT) stablecoin . This move by them indicate a more cautious approach towards complying with existing regulations while they wait for further clarity regarding cryptocurrency regulations within the United States going forward .

Conclusion

The SEC’s lawsuit against these two giants in the cryptocurrency space presents us with both further analysis on why it thinks certain cryptocurrencies are securities as well as a test case into how cryptos will be regulated within America going forward . It remains uncertain what exact outcome will come out of these legal proceedings but one thing is certain: if we want clarity on regulation then we must look towards companies like Biance & Coinbases for answers .