Exchange sued by SEC: Future regulation in the US will be more transparent

SEC sues Exchange, prompting future US regulation transparency.

Yesterday, the hottest event in the industry was the first largest exchange Xan being sued by the US SEC. And this morning, new news came out that the largest compliance exchange in the United States, Coinbase, was also sued by the US SEC.

This front-to-back, tight operation, it seems that the SEC is well-prepared. And judging from this situation, it is feared that more exchanges will be sued one by one by the SEC in the future.

This incident seems to be very sudden, but it was actually expected for a long time.

When a series of catastrophic accidents such as the LUNA crash, the collapse of Three Arrows Capital, and the bankruptcy of FTX occurred, relevant regulatory agencies began to attach great importance to them. At that time, the Korean government and the Singapore government had already begun to tighten their policies on the crypto ecosystem. Especially the major change in attitude of the Singapore government allowed Hong Kong to have the opportunity to quickly enter this track later.

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As the country with the most prosperous crypto ecosystem in the world, the United States is impossible to sit idly by. Therefore, the high-profile regulation by the US government is a matter of time.

I still remember when FTX just collapsed, there was a paragraph in a letter that CZ circulated internally, which roughly meant that now that FTX has collapsed, Xan has become the biggest target, and the external environment in which Xan is located will be even more dangerous. – It implies that as the world’s largest CEX, it will definitely become the first target of regulation.

All these signs indicate that such an event will definitely happen today.

But why did this SEC lawsuit cause strong rebounds from many companies in the ecosystem?

It is mainly because the words and deeds conveyed by this chairman since taking office have shown obvious bias and even extremism.

Before taking office, he gave a lecture on cryptocurrencies at the Massachusetts Institute of Technology. This experience and qualifications are enough to prove his considerable understanding of the crypto ecosystem. When he was still at MIT, he clearly stated that he did not think that Ethereum was a security. However, after he sat in the position of the SEC, his attitude made a 180-degree turn, and in some occasions he said that Ethereum is a security.

In addition, his ambiguous attitude in the FTX bankruptcy incident has allowed some US media to dig out some unclear relationships between him and the founder of FTX.

Furthermore, even if there are suspicions about Xan, Coinbase is a publicly traded company in the United States. If it was able to go public in the US, then why didn’t the SEC comment on whether or not it was violating any laws at the time of its listing, but is now bringing such a lawsuit at this critical juncture?

Just looking at these events, his reputation among US crypto businesses and participants has taken a nosedive. Recently, US congressmen who support crypto assets have made high-profile statements calling for the chairman to step down.

In this context, his lawsuit against Xan and Coinbase is naturally hard to convince, and it makes people wonder what his real intention is – whether to “protect individual users” or to intervene in the healthy development of the crypto ecosystem or to mix personal interests. In the current situation where both the CFTC and the SEC are regulating the crypto ecosystem, he wants to take the lead in regulating the crypto ecosystem.

In order to “protect individual users,” Xan also initiated a vote to ask everyone to vote on who can better protect individual users between Xan and the SEC. As a result, Xan overwhelmingly won over the SEC.

After the indictment was announced, many big Vs and enterprises in the US crypto ecosystem publicly expressed their support for Xan.

Some people even publicly pointed out that such actions would seriously weaken the US’s advantages in the crypto ecosystem and affect US innovation – especially now that other regions in the world are vigorously developing the crypto ecosystem, and the consequences are even more difficult to bear.

I estimate that there are three consequences of this development:

1. Xan will definitely be heavily fined, and this cost will not be small.

As for whether there will be other problems after the heavy penalty, it really depends on whether its internal operations and operations are healthy. If the operations and operations are relatively standardized, I think Xan will survive. But if there are really problems, the consequences are unpredictable.

As for Coinbase, I estimate that it is likely to be let off lightly with only a small fine.

2. US regulation will definitely intervene more forcefully and publicly in the future.

Regardless of whether this lawsuit is reasonable, serious and sincere regulation of the crypto ecosystem should be the trend of the entire industry. I believe that reasonable regulation is a necessary part of the entire industry. Only in this way can more people participate in this ecosystem, and the ecosystem can develop more healthily.

Third, enterprises in the American encryption ecosystem will certainly be more united and strongly resist unreasonable regulation.

I am very optimistic about this.

For example, Coinbase has set aside a huge sum of money to hire lawyers to sue the SEC, and other US companies are preparing to sue the Commerce Department for the unreasonable ban on Tornado Cash.

I believe that under the cooperation of many encryption companies in the United States and the constraints of the rule of law, this exaggerated behavior of the chairman will be restricted, and such unreasonable supervision will only decrease in the future. The future supervision in the United States will be more transparent, more reasonable, and will truly develop in a direction that benefits the encryption ecosystem.

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