Encryption exchange “moving tide”: US SEC “strongly pushed away”, Middle East and Hong Kong “welcoming with a smile”

US SEC rejected "Moving Tide" encryption exchange, while Middle East and Hong Kong welcomed it.

Author: Gorou Mouri

SEC Sharpens Its Sword

Since June 11th, the SEC has caused a huge shock in the cryptocurrency industry. First, Binance.US suspended USD deposits, after the SEC sued Binance and CZ for violating securities laws on June 5th. On Friday, Binance.US suspended USD deposits to protect customers amid mounting 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 resolved in the short term. However, in this lawsuit, the SEC listed many types of cryptocurrencies that do not comply with securities laws in this lawsuit, which is over 100 pages long.

• BlackRock boosts the market but Bitcoin “looks fragile”
• Why is the US government “reluctant” to sell its 5 billion dollars worth of Bitcoin?
• Why do 90% of institutional investors have a positive view on cryptocurrency but still not buy it?

The list of types of cryptocurrencies designated for delisting by the SEC continues to grow. There are at least 19 tokens that are illegal according to the SEC’s lawsuits against Coinbase and Binance that need to be delisted. According to ChainDD statistics, at least 50 cryptocurrencies have been marked as illegal by the SEC, causing liquidity fluctuations in the cryptocurrency industry. Several exchanges have already delisted Cardano (ADA), Solana (SOL), and Polygon (MATIC), which the SEC designated as investment contracts. Robinhood later announced that it would delist cryptocurrencies affected by SEC lawsuits.

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

In addition to Ripple, Coinbase, and individual lawsuits, the United States has conducted strong supervision of the cryptocurrency asset field. For details, please refer to ChainDD’s previous inventory: [ChainDD Exclusive] When Will the US Stop Bombing? CZ and Others Face a Collective Lawsuit of US$1 Billion, Bittrex Withdraws from the US, and [ChainDD Exclusive] US Regulatory Tightening Sends an Important Signal: SEC Sues Justin Sun and Issues Wells Notices to Coinbase, Paving the Way for CBDC Projects.

In addition, there is also a trend of tightening sanctions in the financial field. This week, Janet Yellen of the Federal Reserve mentioned that countries around the world have begun to diversify their holdings of currencies: “Other reserves have increased, but this is expected in developing countries, where 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 Domestic and Foreign Reactions

Currently, both Ripple Labs and Coinbase are questioning when the SEC will produce specific regulatory laws, rather than just hitting them with a stick. However, the US Securities and Exchange Commission (SEC) does not seem ready to regulate the cryptocurrency industry and is still using the Securities Act of more than a decade ago to regulate the industry.

However, the SEC’s coercive measures have not only caused dissatisfaction among industry insiders, but also headaches for lawmakers and law enforcement agencies. Congressman Warren Davidson introduced a bill last week called the SEC Stabilization Act, seeking to restructure regulatory agencies and dismiss Gary Gensler as chairman.

These harsh measures have also caused giant companies in the cryptocurrency industry to choose to flee. In May, Coinbase, the first cryptocurrency stock of Nasdaq, had already turned its attention to opportunities outside the United States and opened an offshore derivatives exchange in Bermuda, allowing institutional clients to invest in Bitcoin and Ether through perpetual futures contracts.

Moreover, certain areas outside the United States, including the European Union, the United Kingdom, Switzerland, Hong Kong, and the United Arab Emirates, have adopted more cryptocurrency-friendly regulations than the United States. In particular, the adoption of the new cryptocurrency asset market (MiCA) law in the European Union has attracted many exchanges and related cryptocurrency industry giants to shift their focus to Europe.

UAE and Hong Kong, Actively Attacking

In addition to Europe, the United Arab Emirates (UAE) and the Hong Kong region, which has been radical since 2023, are also attractive places for the cryptocurrency industry. The UAE launched the UAE Blockchain Strategy in 2019. It strives for the leading position of the global digital currency center. The plan attempts 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 cryptocurrencies and financial technology, and is striving to formulate regulations and implement compliance measures while launching a talent introduction strategy. In just half a year, Hong Kong’s position in the cryptocurrency industry has been significantly advantageous, and the implemented trading license application system promises that the banking industry will fully support approved companies. Many exchanges have launched an attack, and the Hong Kong authorities expect that 80 digital currency and financial technology companies will apply for licenses.

Despite being involved with cryptocurrencies, Hong Kong has announced interest in central bank digital currencies (CBDCs) and even cooperation in cross-border settlement capabilities.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!