The SEC Goes After Binance and Coinbase
The United States’ Securities and Exchange Commission (SEC) is suing Binance and Coinbase for fraud. Both companies are crypto trading websites, which means that cryptos may lose customers.
On June 5, 2023, the SEC put out a press release, stating,[1]
“SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao
Charges include operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities.”
The following day, the SEC put out another press release, stating,[2]
“SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency
Coinbase also charged for the unregistered offer and sale of securities in connection with its staking-as-a-service program.”
The SEC was allegedly created by the US Congress to protect investors. Maybe some of the people who voted for its creation even believed it would. The SEC “regulates” the market while politically connected bankers and businessmen get bailed out.
Per the SEC’s website,[3]
“At the Securities and Exchange Commission (SEC), we work together to make a positive impact on America’s economy, our capital markets, and people’s lives.
For more than 85 years since our founding at the height of the Great Depression, we have stayed true to our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”
Binance and Coinbase are both crypto trading websites.
Per Binance’s About US portion of their website,[4]
“At Binance, we believe that everyone should have the freedom to earn, hold, spend, share and give their money - no matter who you are or where you come from.”
Per Coinbase’s About Us portion of their website,[5]
“We are building the cryptoeconomy – a more fair, accessible, efficient, and transparent financial system enabled by crypto.
We started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Today, we offer a trusted and easy-to-use platform for accessing the broader cryptoeconomy.”
They are major market players, particularly Binance.
According to Shaun Paul Lee writing for Coin Gecko at coingecko.com,[6]
“Binance is the market leader and the largest centralized exchange with a market share of 62.1%. Binance's spot trading volume surged from $544.6 billion in February to $559.8 billion in March 2023, representing a 2.8% month-on-month (MoM) growth.
The second largest centralized exchange is Upbit, which had 7.1% market share and spot trading volume of $64.3 billion in March 2023. This represents a -13.5% MoM growth rate, having recorded $74.4 billion in February 2023.
OKX ended March 2023 as the third largest exchange, with 6.4% market share, along with $57.6 billion of trading volume. The remaining top 10 competitors hold less than 6.0% market share each, with Coinbase at 5.4%, MEXC at 5.2%, and Gate.io at 4.7%.”
This will make cryptos harder to buy and sell. Without a place to buy and sell cryptos, it is hard to connect with individuals trading them. If the places that you do use can be shut down overnight, it could affect demand for cryptos.
The United States’ Securities and Exchange Commission (SEC) is suing Binance and Coinbase for fraud. Both companies are crypto trading websites, which means that cryptos may lose customers.
[1]https://www.sec.gov/news/press-release/2023-101
[2]https://www.sec.gov/news/press-release/2023-102
[3]https://www.sec.gov/about/what-we-do
[4]https://www.binance.com/en/about
[5]https://www.coinbase.com/about
[6]https://www.coingecko.com/research/publications/centralized-crypto-exchanges-market-share
