Encrypted Exchange “Moving Trend”: US SEC “Forced Eviction” Middle East and Hong Kong “Welcoming with Smiling Faces”

US SEC evicts Encrypted Exchange "Moving Trend"; Middle East and Hong Kong welcome with open arms

Author: Goro Mouri, ChainDD

SEC has started the guillotine

Since June 11th, the SEC has taken massive actions, causing huge tremors in the crypto industry. First, Binance.US suspended USD deposits, as the SEC sued Binance and CZ for violating securities laws on June 5th. On Friday, Binance.US suspended USD deposits to protect customers amidst increasing regulatory pressure.

Then, on June 13th, the SEC sued Coinbase.

The lawsuit has actually been going on for a long time and is not a problem that can be solved in the short term. However, in this lawsuit, the SEC listed many types of cryptocurrencies that do not comply with securities laws in the more than 100-page lawsuit.

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The increasing number of types of cryptocurrencies designated for delisting by the SEC is just the tip of the iceberg. Only in lawsuits filed by the SEC against Coinbase and Binance, 19 tokens are listed as illegal and need to be delisted. At least 50 cryptocurrencies are marked by the SEC as illegal, which has caused fluctuations in the liquidity of the crypto industry. At present, several exchanges have delisted Cardano (ADA), Solana (SOL), and Polygon (MATIC), which the SEC designated as investment contracts. Robinhood then announced that it would delist cryptocurrencies affected by the SEC lawsuit.

The SEC’s lawsuit with Ripple Labs is also a qualitative issue for XRP, and there is still no specific solution after more than three years. According to ChainDD’s market monitoring, XRP has fallen by 2.05% in the past seven days.

In addition to Ripple, Coinbase, and personal lawsuits, the United States has imposed strong regulatory measures on the cryptocurrency field.

Other than that, there is also a trend of tightening sanctions in the financial sector. This week, Janet Yellen mentioned that countries around the world have started to diversify their holdings of currencies: “Other reserves have increased, but this is expected in developing countries, and a country is seeking a diversified economy… We can expect over time that the share of other assets in national reserves will increase. Diversification is a natural desire…”

Strong reactions at home and abroad

Currently, Ripple Labs and Coinbase are both questioning when the SEC will present specific written regulatory laws instead of randomly hitting things with a hammer. However, the US Securities and Exchange Commission (SEC) does not seem ready to regulate the cryptocurrency industry and is still using the Securities Act from more than a decade ago to regulate the crypto industry.

However, the above mandatory measures of the SEC have not only caused dissatisfaction among industry insiders, but also headaches for legislators and law enforcement agencies. Congressman Warren Davidson introduced a bill last week called the SEC Stabilization Act, which seeks to restructure regulatory agencies and remove Gary Gensler as chairman.

These stringent measures have also prompted cryptocurrency industry giants to choose to flee. In May, Nasdaq’s first cryptocurrency stock, Coinbase, had already set its sights on opportunities outside the United States, opening an offshore derivatives exchange in Bermuda that allows institutional clients to invest in bitcoin and ether through perpetual futures contracts.

Moreover, some regions outside the United States, including the European Union, the United Kingdom, Switzerland, Hong Kong, and the United Arab Emirates, have adopted more crypto-friendly regulations than the United States. Especially with the passage of the European Union’s new crypto asset market (MiCA) law, many exchanges and related cryptocurrency industry giants have shifted their focus to Europe.

The United Arab Emirates and Hong Kong, China are actively attacking

In addition to Europe, the United Arab Emirates (UAE) and the increasingly radical Hong Kong region after 2023 are also hotbeds for attracting the cryptocurrency industry. The UAE launched its UAE Blockchain Strategy in 2019, aiming to become the world’s leading digital currency center. The plan aims to transfer 50% of all government transactions to the blockchain.

In the Asian region, in January 2023, Hong Kong Financial Secretary Chen Maobo announced that the government is committed to establishing an ecosystem for cryptocurrency and fintech, opening up talent introduction strategies, and trying to formulate regulations and enforce compliance measures. In just six months, Hong Kong’s position in the cryptocurrency industry has become increasingly advantageous, and the implemented trading license application system has promised that the banking industry will fully support approved companies. Many exchanges have launched attacks, and Hong Kong authorities expect that 80 digital currency and fintech companies will apply for licenses.

Although having been involved in cryptocurrencies, Hong Kong has announced its interest in central bank digital currencies (CBDC) and is even cooperating on cross-border settlement functions.

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