The Securities and Exchange Commission’s one-two punch attacking Binance and Coinbase – two of the largest crypto exchanges in the world – may push other crypto marketplaces outside the US.
As the US has struggled to craft new regulations to oversee the digital asset marketplace, the SEC has decided to treat every digital asset as a security. While the SEC has been pursuing crypto issuers and other platforms for years now, this week, the SEC targeted two of the best-known names for operating unregistered securities.
Following the two enforcement actions, CI received a comment from Matteo Greco, Research Analyst at Finequia (CSE:FNQ), predicting the most recent lawsuits may push other platforms outside the US to more crypto-friendly jurisdictions. Greco said the Commission is “bearing down hard against exchanges.”
“The actions of the US regulator could push many exchanges outside the country, similar to what has transpired in Canada. It could benefit the Asian market, which is moving toward a friendlier environment for digital assets. As of June 1, the Japanese government lifted a ban on stablecoins, and the Hong Kong government legalized the trading of cryptocurrencies by retail investors. Hong Kong asset manager First Digital is introducing a new stablecoin, for example, that will be pegged to the U.S. dollar,” noted Greco. “These moves underlie attempts by Asian regulators to attract new investors in the digital asset market, a shift in attitude to the recent past, especially in China where cryptocurrency trading and bitcoin mining have been restricted.”
Greco said the legal environment, coupled with the challenging economic situation, has caused the price of Bitcoin to sink with trading volumes at low levels. He said that on-Chain BTC volume decreased by 13% during the month of May. The US continues to be one of the largest crypto markets in the world – even without bespoke rules. This trading activity may now be in peril as crypto exchanges regroup and rethink their future in the US.