Regulation
Legal battles intensify as cryptocurrency regulation stalls!
Lack of clarity Cryptocurrency Regulation in the United States has created an endless war between the Securities and Exchange Commission (SEC) and established web3 companies led by Coinbase Global Inc(NASDAQ: COIN) and Ripple Labs. Although the topic of digital assets has been cited as a major issue in the upcoming U.S. general election, the current administration has failed to enact clear crypto regulations.
As a result, most Web3 executives have criticized the leaders for lagging behind other major jurisdictions that have already adopted a clear framework for digital assets.
For example, the United Arab Emirates (UAE) has recently attracted more Web3 companies due to its clear and user-friendly digital asset regulations. The European Union is rapidly rolling out the Markets in Crypto-Assets (MiCA) regulatory framework to ensure sustainable adoption of Web3 and digital assets.
US SEC vs. Coinbase Dispute
In recent years, the US SEC has accused Coinbase Global of operating as an unregistered securities exchange, broker-dealer, and clearing agency. Although the US SEC has failed to convince the court in several cases that digital assets violate securities laws, the agency has continued to fight Web3 companies.
For example, a US court recently ruled that Binance’s native currency did not violate securities laws under the Howey test. Last year, in the Ripple lawsuit, a judge ruled that sales of XRP on exchanges did not constitute investment contracts.
Coinbase fights back
Coinbase lawyers, led by its general counsel Paul Grewal, have accused the SEC chairman of being a double agent in regulating the digital asset industry. According to recent court documents sent to Judge Katherine Polk Failla, Coinbase has urged the court to force the SEC and Gensler to produce relevant documents. Coinbase is seeking personal emails sent by Gensler both before his tenure as chairman and as a professor at MIT.
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The massive adoption of digital assets by institutional investors and retail traders has attracted more attention from lawmakers. The recent approval of Bitcoin and Ethereum spot ETFs is a clear indication of the increased demand.
However, Web3 leaders are more likely to support lawmakers who are pro-digital asset industry, not anti-digital asset industry.
Read also: Coinbase Sues SEC, FDIC, Demands Transparency in Cryptocurrency Regulation