SNEAK PEEK
- Staff for Senator Lummis claims the SEC is looking into all U.S. cryptocurrency exchanges.
- The employee said that every U.S. cryptocurrency exchange, including Binance, the largest exchange in the world, is allegedly under investigation.
- Long before Ethereum and pretty much any other cryptocurrency other than bitcoin and its early imitators existed, the CFTC declared regulatory authority over what it previously referred to as “virtual currencies” in 2014.
According to a member of U.S. Senator Cynthia Lummis’ (R-Wy) staff, widely reported claims that the U.S. Securities and Exchange Commission (SEC) is looking into the $20 billion cryptocurrency exchange Coinbase are only the tip of the iceberg.
Every U.S. cryptocurrency exchange, including Binance, the biggest exchange in the world, is reportedly under investigation, according to the staff member. According to bitcoin analytics provider CoinGecko, there are over 40 U.S. cryptocurrency exchanges. Too many requests for comment, but the SEC has not answered.
BREAKING: A staffer from U.S. Senator Cynthia Lummis’ office says EVERY U.S. exchange—and the largest crypto exchange in the world, Binance—are in various stages of being investigated by the SEC: https://t.co/XnZaFYYrzx by @DelRayMan
— Michael del Castillo (@DelRayMan) August 4, 2022
The staffer claims that the SEC urgently wants to settle its dispute with the CFTC over jurisdiction over the crypto industry following several SEC actions asserting the regulator’s domain over the industry and an equally strong response by the U.S. Commodity Futures Trading Commission (CFTC) pushing back against what it terms “regulation through enforcement.” He claims that if the issue cannot be settled within, lawmakers will need to intervene, and Congress is likely to support the CFTC.
The CFTC declared regulatory authority over what it previously referred to as “virtual currencies” in 2014, long before Ethereum, and pretty much any other cryptocurrency save bitcoin and its early imitators existed. After that, a Federal Court determined in 2018 that the CFTC could pursue fraud claims involving virtual currency.
Similar to this, the SEC has repeatedly argued that bitcoin is a commodity. Additionally, in a speech in June 2018, SEC director William Hinman implied that he did not consider Ethereum to be a security and that it might be under the CFTC’s purview.
When Gary Gensler, the SEC chairman, hinted that Ethereum was security when he remarked that bitcoin was the only cryptocurrency asset he felt comfortable referring to as a commodity in June, there was some indication that things could be changing.
According to a staffer for Senator Lummis, both proposals have a chance of passing less than 50% this year. According to him, only a catastrophic black swan event, such as the collapse of a significant U.S. exchange, could convince lawmakers to support either bill this year.
