As cryptocurrency exchanges Binance and Coinbase found themselves in hot water with the US Securities and Exchange Commission (SEC) last week, experts warn that other crypto exchanges and crypto firms may also find themselves under the regulatory microscope.
Last June 4th, SEC officials called out Binance, currently the largest crypto exchange in the world, for offering twelve crypto tokens without registering them beforehand as securities. The following day, June 5th, it was Coinbase’s turn as the SEC accused it of trading at least thirteen digital assets which were, based on their criteria, considered securities that needed to be registered.
Both exchanges in question have denied the allegations and are set to make a strong defense. As of press time, however, SEC officials have yet to comment on the matter.
Rethinking in the Face of Changing Regulations
In both cases, it has become apparent that the SEC has increased its roster of digital assets which it now considers securities. This has raised concerns among other exchanges, particularly those that have traded such tokens with American investors.
That said, executives at companies like Crypto.com, Gemini, Kraken, and Okcoin have begun to ask if they, too, could be accused of breaching SEC regulations. This has resulted in some of these exchanges thinking of delisting a number of tokens.
A Need for Greater Compliance…and Vigilance
Keeping all these in mind, several industry experts say that crypto companies, particularly exchanges trading in digital assets, should now be more aware of changing regulations.
As Jason Allegrante, chief legal and compliance officer for digital asset infrastructure firm Fireblocks, puts it, exchanges doing business in the United States need to be aware that they could be targets for regulatory action if they allow tokens that are considered securities to be traded on their platforms.
Meanwhile, officials at Bitstamp, another crypto exchange, released a statement declaring that they are taking any new regulatory developments seriously and are presently reviewing new information to determine their course of action.