The lack of clear crypto regulations in the United States has created an unending war between the Securities and Exchange Commission (SEC) and established web3 firms 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 US general election, the current administration has not enacted clear crypto regulations.
Many Web3 leaders criticize US policymakers for lagging behind other major jurisdictions that have already established clear digital asset frameworks. For instance, the United Arab Emirates (UAE) has recently attracted numerous Web3 companies due to its transparent and favorable digital asset regulations. Similarly, the European Union is swiftly rolling out the Markets in Crypto-Assets (MiCA) regulatory framework to foster sustainable Web3 and digital asset adoption.
With digital assets taking center stage in the upcoming US election, will the current administration finally deliver long-awaited crypto regulations? Read on to find out how this regulatory tug-of-war is impacting the future of crypto in the US.
SEC’s Pursuit of Web3 Firms
Over the past few years, the US SEC has repeatedly accused Coinbase Global of operating as an unregistered securities exchange, broker, and clearing agency. Despite failing to convince the courts in several instances that digital assets violate securities laws, the SEC continues to challenge Web3 companies.
For example, a recent US court ruling determined that Binance’s native coin did not violate securities laws under the Howey test. Additionally, last year’s lawsuit against Ripple concluded with a judge ruling that XRP sales on exchanges do not constitute investment contracts.
Coinbase vs. SEC
Coinbase’s legal team, led by Chief Legal Officer Paul Grewal, has accused SEC Chair Gary Gensler of being a double agent in his regulation of the digital assets industry. In recent court documents submitted to Judge Katherine Polk Failla, Coinbase urged the court to compel the SEC and Gensler to produce relevant documents, including personal emails sent by Gensler before his tenure as chair and during his time as a professor at MIT.
Looking at the Bigger Picture
The mass adoption of digital assets by institutional investors and retail traders has increasingly drawn the attention of lawmakers. The recent approval of spot Bitcoin and Ethereum ETFs signifies a heightened demand for these assets.
However, Web3 leaders are more likely to support lawmakers who advocate for the digital assets industry rather than oppose it.
Read Also: Coinbase Sues SEC and FDIC, Demands Transparency in Crypto Regulations
The pressure is on for clear crypto regulations that foster innovation, not stifle it. What do you think?
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