The U.S. Securities and Exchange Commission (SEC) has been stepping up its law enforcement game recently, after putting its hands on the largest US crypto exchange to date – Coinbase. Now, the regulator may go an extra mile, setting its crosshairs on Binance – the largest crypto exchange to date.
The two exchanges made extra efforts to please the regulatory watchdog, with Binance even opening up a US subsidiary with limited services to American customers.
However, the SEC still finds the moves by the largest players in the crypto game, while the Commodity Futures Trading Commission (CFTC) is taking a more crypto-friendly stance. Meanwhile, the SEC seems to have been involved in the investigation of every U.S. crypto exchange.
Is the SEC acting beyond its jurisdiction?
It turns out that cryptos are yet to be classified as securities, which puts the SEC into a very uncomfortable position – acting above what the regulator can do.
Republican Senator Tom Emmer waved the flag of concern, stating that the agency and its anti-crypto chair Gary Gensler were “hellbent on expanding the size of its crypto enforcement division using enforcement to unconstitutionally expand its jurisdiction.”
However, the SEC may soon resolve the dispute with the CFTC about who controls cryptos, according to inside information.
“If the matter isn’t resolved internally, legislators would have to get involved, and that Congress is likely to side with the CFTC,” the insider noted.
In order to widen the CFTC jurisdiction over cryptos, senators pushed two bills recently, but the chances of them being passed in 2022 are less than 50%, according to the insider. The two bills in question are the Lummis-Gillibrand bill, which was submitted on June 7, while the Digital Commodities Consumer Protection Act was announced this week.
The battle for regulatory control over cryptocurrencies may increase, as the SEC already sent Wells Notices to many U.S. exchanges, formally informing the platforms that there will be some sort of action against them from the regulator. Interestingly, the Wells Notices are different and separate from standard SEC procedures.
The pressure caused Binance’s US branch to delist the AMP token, which the SEC accused of being a security, which shows just how serious the regulatory havoc in the United States really is.
In turn, the AMP token plummeted after the delisting, reaching a monthly low of $0.008093, despite trading at $0.00935 per token just before the delisting.