SEC strikes heavily and big Vs can’t sit still

SEC strikes hard, big Vs can't stay calm.

Author: Loopy Lu, Star Daily

Just one day after SEC sued Binance and Changpeng Zhao (CZ), SEC launched a lawsuit against Coinbase in the New York federal court.

Early yesterday morning, SEC Chairman Gary Gensler said in a live broadcast on Bloomberg that it is difficult to trust these “casino operators” to protect the interests of investors, and the institutional boundaries and business models applicable to the crypto system have not been seen in any other financial field. Crypto is still the Wild West.

So far, ten states in the United States have taken legal action against Coinbase for violating securities laws, including Illinois, Vermont, Alabama, Kentucky, California, Maryland, Wisconsin, Washington, New Jersey, and South Carolina.

Coinbase responded to the lawsuit dispute late at night, stating that “The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have made conflicting statements, and there is no agreement on what is a security and what is a commodity. At the same time, SEC’s enforcement approach has also harmed US interests.”

Binance.US issued an official statement, saying that SEC’s lawsuit is unfounded, and will actively defend itself. It also stated that “SEC’s lawsuit is unreasonable based on facts, law, or the Commission’s own precedents,” and will seek congressional intervention to create a viable regulatory system for digital assets through bipartisan legislation.

Both Coinbase and Binance, the two most influential companies in the crypto world, are now facing SEC’s iron-fisted sanctions. The crypto world is facing an unprecedented policy crisis and is united like never before.

How do the leaders of the crypto world view this crisis?

Fire at Gensler!

There is no doubt that Gensler is under strong criticism from the crypto world. Almost everyone points the finger at this SEC chairman who is “familiar with cryptocurrency.”

Ripple CEO Brad Garlinghouse tweeted, “If it wasn’t clear before, SEC Chairman Gensler’s recent remarks confirm his hostility to innovation and cryptocurrency.  Gensler’s actions directly undermine confidence in the US capital markets, which will ultimately hurt consumers and harm innovation.”

“Watching an unelected bureaucrat like this disguise his and his organization’s pursuit of power is embarrassing. No one is fooled,” Garlinghouse added.

Andreessen Horowitz (A16z) partner and former Coinbase CTO Balaji Srinivasan tweeted, “The fact that the SEC is fighting Ripple only means one thing: it’s already lost. It has lost its way, its mission, its legitimacy.”

In a long post, Srinivasan criticized the SEC’s failure, the failure of the regulatory system, and the unfairness of the current regulation. He believes that the 20th-century regulatory system was designed for a few large companies, but the arrival of the decentralized era has made it difficult for regulators to regulate a large number of decentralized targets effectively. In the past, regulatory agencies have used the media to create public opinion and tried to convict them in the public opinion field to enhance the agency’s energy. The rise of social media has forced regulatory agencies to defend themselves in public, and the media no longer has privileges, marking the challenge of digital democracy for regulatory agencies.

Balaji has a disdainful attitude towards regulators and said, “The expertise of regulatory agencies is declining relative to regulatory goals because people who understand specific areas tend to become builders or investors in those areas, not regulators.”

The Chief Policy Officer of the Blockchain Association said, “For years, the SEC has failed to provide useful guidance or conduct effective rulemaking, all the while falsely claiming ‘the law is clear.’ The SEC tells exchanges to ‘come talk to us’ but then refuses to explain how to register. It’s absurd!”

Erik Voorhees, founder of ShapeShift, also directly attacked the SEC poetically:

“The impotent lord struggles and struggles in his crumbling castle, while the civilization builds around him. His subjects are first afraid, then angry, then amused. Finally, they are no longer his subjects.”

SBF, FTX and Corruption?

Previously, the close relationship between SEC and FTX was in stark contrast to the heavy blow against Binance and Coinbase. Nick Tomaino, a general partner of cryptocurrency fund 1confirmation, implied the relationship between the Biden administration and this incident:

“SBF was the second-largest donor to Biden’s presidential campaign, and Biden appointed Gary Gensler as chairman of the SEC.”

Gary Gensler held a friendly meeting with executives from SBF and FTX, and after FTX won the favor of the SEC, it was exposed by the cryptocurrency community as one of the largest fraud cases in history. The SEC has attacked sound and legal companies (Coinbase, Kraken) that have been trying to cooperate sincerely with regulatory agencies for more than a decade.”

Ryan Sean Adams, co-founder of Bankless, also mentioned the failure of the SEC. He reminded Gensler and the SEC on Twitter:

“Failed to catch FTX ($8 billion fraud and bankruptcy); Failed to protect Grayscale investors ($8 billion devaluation); Failed to protect borrowers of Voyager, Genesis, and BlockFi (bankruptcy amount exceeds $4 billion). Gensler is an incompetent bad law enforcement officer.

He stated, “I do not respect the SEC under Chairman Gensler’s leadership. Over the next 18 months, we will do our best to elect sensible politicians who can restore normal order to regulatory agencies. The United States needs visionary leaders, not incompetent and corrupt law enforcement officers.”

History continues to move forward

As one of the most well-known Bitcoin supporters in the world, former Twitter CEO Jack Dorsey has little relevance to this regulatory action, but he once again actively promotes Bitcoin to the world: “Today there are only three truly large-scale anti-censorship technologies: tor, Bitcoin, and nostr.” “Most people in the world actually don’t care about censorship systems. Admittedly, these technologies are not easy to use, but they will eventually become easy to use!”

Jake Chervinsky, Chief Policy Officer of the Blockchain Association, said that he has two feelings about the SEC’s lawsuits against Binance and Coinbase:

“Anger, feeling angry about the SEC’s despicable tactics and overtly hostile behavior, and SEC’s blatant disregard for its own mission.”

Comforting, the SEC is finally taking action and the results aren’t so bad? Life and business continue as usual.”

Despite the current legal crises, Alex Gladstein, Chief Strategy Officer of the Human Rights Foundation, remains optimistic about the future. He said, “US financial regulators may eventually attack Bitcoin. Fortunately, in the United States, we have a system of checks and balances. Governors, congressmen, courts, and citizen interest groups will oppose executive power, and many politicians will soon launch a counterattack.”

Perhaps, as Balaji said in his lengthy tweet, “the arc of history is long, and right now our history is trending towards decentralization.”

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