SEC: Our Rules Are Simple – There Are No Rules at All
Lawsuits, litigation, and public accusations – all this has recently become familiar to the crypto community. Day in and day out the news is: “Binance is accused of financial fraud”, “Coinbase unregistered activities”, “Bittrex illegal trading”. But what if the true goals are not to fit crypto exchanges under general regulation? What if Gary Gensler has a cunning plan that promises to rewrite the rules of the game?
“Everyone who is not with us is against us” – this is how the interim results of the Securities Commission work can be characterized. The SEC represented by Gensler demonstrates in every way that there should be no decentralization even if the entire system has to be broken.
The desire for centralization and lack of decentralization in the world of securities is what has been the main topic in recent months. It is no secret that blockchain offers unique opportunities for the development of an independent financial system. But it seems that Gensler and Co. have decided to take a tough stance and prevent even the slightest penetration of decentralization into the sphere of securities.
The SEC actively opposes the blockchain development seeking to bring all processes under the control of centralized authorities. At the same time despite the possible consequences the commission, without hesitation, demonstrates the power and lack of tolerance for market participants. The SEC does not seek to maintain the status quo and no compromise is included in their plans.
Lado Okhotnikov: Skirmish Between SEC and Crypto Exchanges Is a Deceptive Maneuver
While crypto fans are watching how the skirmish between CZ and SEC will end, much more significant things are happening.For example, under the guise of a regulator Bitcoin-ETF is being launched, an innovative tool in the securities market that will open up investment opportunities for large trillion-dollar funds.It is believed that newly formed exchanges or existing ones will use Bitcoin as an underlying asset buying the first cryptocurrency and then selling their shares to investors.Simply put, the same BlackRock, Fidelity, WisdomTree, Charles Schwab, Invesco and Citadel will start trading with obligations and guarantees to investors, earning on the resale of services.
This will lead to a significant inflow of capital from institutional organizations which include pension funds and insurance funds into the centralized system. Thus, on the part of the regulator a powerful base is being created that protects against the leakage of assets to DEX exchanges.
Naturally the arrival of large investors promises an increase in liquidity making the market more stable. So they want to get a grip of these investors so that they do not even dare to think about some kind of decentralization. That is, the whole struggle will soon come to naught as the fighters who preach the true goal of blockchain creation will disappear. This is exactly what the regulator wants. And yet there is no talk of any concern, protection of the rights of investors.
In this connection undesirable people are being removed from the market. Binance and Coinbase have just got under the Gensler’s roller. I’m not talking about FTX and Bittrex since this is a waste material and has already been dealt with. Why this has happened is no longer interesting to anyone – after all the goal has been achieved.
It is noteworthy that 239 crypto exchanges have closed recently. Impressive, isn’t it?
Crypto exchanges closing dynamics
If you look at the chart you can see how the main part of the participants left just before the potential market growth.No adequate business would cease operations in anticipation of a positive movement unless it were pressured from outside.
Against the backdrop of what is happening in the coming months I expect the proceedings to continue.Most likely lawsuits will be artificially initiated in order to exclude competitive participants.This work will serve as an aid to the final control establishment by the SEC and leaving only those participants who comply with their ideas of “law-abiding”.
Those who think that there is nothing wrong with centralization do not fully understand the picture of what is happening.Participants in such a system can easily unite to achieve a common goal even if it will be unprofitable for others.The main thing is that the initiator is satisfied; otherwise you will be easily kicked out of the impromptu “league”.
On the other hand the SEC realizing that resistance is useless is looking for alternative ways to implement plans.In this case the tactics of conformism is used in order to lay in society the beliefs they need.Continued repetition of “white is black” and “black is white” will eventually lead people to believe these statements.And decentralization will be equal to crime.
In Search of Truth
Regulatory pressure on Binance, Coinbase and previously Ripple is only growing. In this respect Ripple can be said to have become a pioneer. It was Ripple who took the first battle with the system when allegations of creating an unregistered security and illegal sale of XRP tokens in the amount of $ 1.3 billion poured down. Reprimands have become the starting point in the proceedings but Garlinghouse still does not give up continuing to protect the interests of the community.
In general this process causes a lot of debate and controversy among cryptans. It also highlights the complexity of the relationship between companies and regulators as well as the ambiguity of the legislation that regulates the cryptocurrency transactions.
Some may think that it is unrealistic to win a lawsuit against the SEC as this will lead to other similar lawsuits. This is what they fear in Gensler’s office so the cases are dragged or transferred in a different direction. For example, the other day the court has called for “self-resolving the differences that have arisen” in the proceedings between Binance US and the SEC:
NOTE: The judge HAS NOT ruled one way or the other on the motion to freeze assets, but she said she’d rather have the parties come to an agreement on their own. She asked for a status report on the negotiations by Thursday afternoon.
— Katie Buehler (@bykatiebuehler) June 13, 2023
This clearly indicates Themis’s position: one wrong move on its part and Gensler’s house of cards will collapse. Therefore his hands are untied because no one prevents him from forbidding anything like that.
For example, if tomorrow the SEC declares that bitcoin is a security this will cause a significant outflow of investments and a possible collapse of the entire crypto market. However, it should be noted that this is an assumption and it cannot be considered a fact or a guarantee of future events. But judging by the way the Commission throws accusations right and left such a scenario is not excluded.
There Are Doubts – There Are No Doubts!
We have already understood that the SEC can cheer up everyone at any time. Monday, June 5, the beginning of the trading week, the market is set to positive and then Gensler rolls out an accusation towards Binance. The claims relate to operations with unregistered securities including the receipt of profit and the implementation of investment schemes implemented on the platform.
Well the crypto community is somehow coping with the panic, CZ assures everyone that there is no threat of bankruptcy – we are working as before. “The prank failed” and the very next day Coinbase gets hit. Here the market does not withstand the onslaught of “positive” news and there is a fall.
BNB falls amid SEC lawsuit
It is logical if you want to analyze some issues you do it sequentially. And the SEC behavior can hardly be called methodical since one lawsuit was immediately followed by another. In fact it is a clear manipulation in order to intimidate, to catch up with fear.
Does everyone remember Gary Gensler’s statements regarding cryptocurrency regulation? He stressed the importance of investor protection and fraud prevention. However I would like to ask — what kind of protection are we talking about when market participants are trying to get rid of the troubled asset after the repeated lawsuit while losing on the exchange rate difference.
No, this is not a conspiracy theory. Instead, systematic work is underway to regulate financial institutions so that they function in accordance with the rules that suit only the SEC. Nevertheless, the market continues its upward movement. After all we know: the more the spring is compressed, the stronger it will shoot. But before it most of the “hamsters” will be kicked out since they are not needed in the “bull’s” market.