As SEC brings charges against Binance and Coinbase — watch out for three red flags before investing in crypto

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A cloud of uncertainty hangs over the regulation of crypto exchanges, and has put pressure on cryptocurrency prices.

Last year, Bitcoin tumbled from its 2021 perch — and 2022 ended with the implosion of the cryptocurrency exchange FTX.

The SEC charged Binance, the world’s largest crypto exchange and founder Changpeng Zhao with mishandling customer funds, and illegally serving U.S. investors. The SEC also charged Coinbase, the only publicly-traded crypto exchange company, with illegally operating an unregistered securities exchange.A cloud of uncertainty hangs over the regulation of crypto exchanges, and has helped to push down cryptocurrency prices.

2. As lawmakers introduce more bills, some analysts are wondering if Congress can cobble together some sort of statutory reform for crypto markets. The prospect of this happening is “highly improbable,” Guseva said. The SEC’s enforcement division “has been covering an ever-increasing swath of the crypto industry,” she noted.Binance, Coinbase and Ripple fired back Binance said in a blog post this week: “The SEC’s real intent here, instead, appears to be to make headlines.

Legislation, instead of litigation, is the solution, he said. “In the meantime, we’ll continue to operate our business as usual,” Grewal added. But the government is not after users’ money and assets, said Oleg Elkhunovich, a partner at Susman Godfrey. “Disgorgement is a remedy that goes after improperly-gotten gains. Those would not be user assets. User assets should be separated,” he said.

FTX is in bankruptcy proceedings and while its co-founder and former CEO, Sam Bankman-Fried, has pleaded not guilty to criminal charges. Bankman-Fried is facing charges including fraud and conspiracy. The trial is scheduled to start in October. When clients have asked about crypto investments, “I’ve always made the caveat this is a new innovative idea and I would not put more than you can afford to lose.” Nathoo’s rule of thumb: It should be less than 1% of their net worth.

 

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SEC crackdown on Binance and Coinbase surge DeFi trading volumes 444%Trading volumes on the decentralized exchanges Uniswap, Pancakeswap and Curve witnessed a significant boost from the SEC's recent lawsuits against Binance and Coinbase. Total daily trading volumes on Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum) and PancakeSwap v3 (BSC) — which account for 53% of the total DEX trading volume in the last 24 hours — increased by more than $792 million between June 5 and June 7.
Source: Cointelegraph - 🏆 562. / 51 Read more »