Update 06/08 below. This post was originally published on June 7.
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The bitcoin price has swung wildly this week as the SEC launched legal action against first cryptocurrency exchange Binance and then US-based rival Coinbase.just after Congress introduced a potentially game-changing crypto bill.
Now, a US judge has ordered the SEC to respond within seven days to a 2022 petition by Coinbase, asking the regulator to provide "regulatory clarity" on how existing securities laws might apply to bitcoin, ethereum and other cryptocurrencies.
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SEC Chairman Gary Gensler has been waging a war against cryptocurrencies in recent years, causing ... [+]
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The United States Court of Appeals for the Third Circuit has ordered the SEC to explain whether it intends to deny Coinbase's application, the reasons for such a decision, or a timeline for when it expects to reach a conclusion. reported by Coindesk.
"Rules of the road, from legislation or rulemaking or both, must come before enforcement actions. That's why we petitioned the SEC for rulemaking almost a year ago in the first place," Paul Grewal, Coinbase Chief Legal Officer, aware to Twitter.
"We continue to believe that the SEC would not be able to proceed with litigation against our industry, such as the case brought against us today, if the SEC had not already decided to deny our rulemaking request."
Update 06/08: The US Securities and Exchange Commission (SEC) blitz of the crypto industry has continued, and the SEC alleges in a new court document that Binance cryptocurrency exchange CEO Changpeng "CZ" Zhao and his close associate Binance financial and administrative administrator Guangying Chen funneled billions of customer funds to CZ's offshore trading company Merit Peak , through a holding company called Key Vision Development Limitado.
In its 13 charges, the SEC claims that CZ and Binance used Merit Peak and Sigma Chain, another of CZ's trading companies, to mix corporate funds with client assets to use "as they see fit." "The SEC has been unable to determine why an entity controlled by Zhao that was allegedly operating on the Binance.US platform using CZ's personal funds would have acted as a 'transfer' account for billions of dollars of the funds of the clients of the Binance platforms". The court filing says, and goes on to allege, bank statements show $12 billion was sent to CZ and $162 million to a company controlled by Guangying Chen in Singapore.
In April, Coinbase filed the legal challenge in an attempt to force the hand of the SEC and alleging that the current requirements are not adequate for bitcoin, cryptocurrencies, and digital assets such as non-fungible tokens (NFTs).
"If the SEC's answer to our rulemaking request is 'no,' then the law requires them to tell us, because we have a legal right to challenge that 'no' in court. And there are serious questions to ask." Grewal added.
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The bitcoin price has swung wildly in recent years with the 2022 cryptocurrency price crash wiping out $2 ... [+]
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This week Coinbase, along with rival Binance, were sued by the SEC, with both being sued for violating US securities laws. The SEC complained that Coinbase and Binance failed to register as exchanges and marked many of the cryptocurrencies available for trading on the two exchanges as securities.
SEC Chairman Gary Gensler defended the regulator's approach, criticized by some in the crypto community as "regulation by enforcement."
โThe investing public benefits from US securities laws,โ Gensler said CNBC. "Crypto should be no different, and these platforms, these intermediaries must comply."
