Although regulations are essential in all industries, overly strict laws can sometimes impede growth. The Securities and Exchange Commission [SEC] has evidently chosen a more rigorous approach, intensifying its scrutiny of the crypto industry. This has led to prominent exchanges like Binance and Coinbase facing legal actions in the form of lawsuits. Amidst this, several in the industry were fearing and betting on the next exchange on the SEC’s radar.
Many cryptocurrency community members believe that Crypto.com may be the next exchange to face scrutiny from the SEC. The SEC has accused Binance and Coinbase of selling “unregistered securities.” Assets under this list are, Solana [SOL], Cardano [ADA], Binance Coin [BNB], Binance USD [BUSD], Polygon [MATIC], The Sandbox [SAND], Axie Infinity [AXS], Decentraland [MANA], COTI [COTI], and Cosmos [ATOM]. Crypto.com and several other prominent exchanges have been supporting these assets.
A member of the community took to Twitter to share her thoughts about the same.
The SEC will likely sue Crypto .com— Crypto Tea (@CryptoTea_) June 8, 2023
they sued Coinbase and Binance for selling securities
specifically naming Solana, Cardano, Sandbox, Matic, CHZ, BNB, Mana, Algo and more
crypto .com also sells ALL of these cryptos
plus they launched their own CRO coin
plus they offer… pic.twitter.com/2nuqd5ljVY
But Crypto.com is primarily based in Singapore, how will it fall under the SEC’s purview?
This was a common notion that surfaced throughout crypto Twitter. However, many members of the community pointed out that entities providing services to U.S. citizens come under the regulatory jurisdiction of the SEC. Crypto Tea highlighted the fact that even if an exchange does not have a physical office in the U.S., the SEC can still take action against them for merely offering services to U.S. residents. Many community members emphasized the potential reach of the SEC’s authority in such cases.
Several individuals also highlighted the notion that if two of the largest exchanges, namely Binance and Coinbase, were subjected to lawsuits by the SEC, it is likely that other exchanges would not be exempt from potential legal actions.
Amidst these bets, there were some who remained optimistic about the fate of Crypto.com. One Twitter user wrote,
“But @cryptocom really went out of their way to get permits and licenses for everything everywhere lol I’m sure they have a better leg to stand on if the SEC goes after them #crofam is strong I still have faith in #cro in the long term goals of helping mass adoption”
These discussions and speculations about the SEC’s actions and their potential impact on other exchanges are based on conjecture at this point. The uncertainty surrounding the future of other exchanges in relation to the SEC’s regulatory actions remains. It is unclear whether the SEC’s focus will solely be on Binance and Coinbase or if it will extend to other platforms. Ultimately, only time will reveal the course of action the SEC takes and its implications for the broader cryptocurrency exchange landscape.