The US regulator SEC threatened to sue the Coinbase crypto exchange and launched an investigation against Uniswap. What will this lead to and how can it affect digital assets
On September 8, it became known that the US Securities and Exchange Commission (SEC) threatened the largest American cryptocurrency exchange Coinbase with a lawsuit over the new Lend lending service, which the trading platform planned to launch in the coming weeks.
According to Coinbase CEO Brian Armstrong, the regulator refuses to explain why it considers loans as unregistered securities. If the case goes to trial, the industry will finally be able to get regulatory clarity, which the SEC refuses to provide, according to the head of the crypto exchange.
SEC’s Attention to the Digital Asset Market
On September 3, it was reported that the SEC launched an investigation against the operator of one of the largest decentralized crypto exchanges — the company Uniswap Labs. The investigation is at an early stage — the regulator is finding out how the trading platform works and transactions are carried out.
A representative of Uniswap Labs said that “compliance with laws and regulations” is the company’s policy, and confirmed its readiness to provide all necessary information to regulatory authorities.
Uniswap is a decentralized cryptocurrency exchange that was launched in 2018. In April of this year, the weekly trading volume on the site for the first time exceeded $10 billion.
In August, the head of the SEC, Gary Gensler, said that the sphere of decentralized finance (DeFi) needs regulation. The head of the regulator argued that, in particular, cryptocurrency loans should be controlled by the SEC. Gensler also suggested that decentralized crypto exchanges should be attributed to the regulation of mutual funds.
Gensler expressed doubts that DeFi services are really decentralized. In his opinion, many such sites use centralized management principles and can be regulated by supervisory authorities.
Now there is a lawsuit between the SEC and Ripple, which began at the end of last year. The regulator accused the company of issuing unregistered securities under the guise of XRP tokens for $1.3 billion.
On the way with China
The US authorities continue to follow the same path of regulating the cryptocurrency market as China, said the head of the data analysis department CEX.IO Broker Yuri Mazur. But the American authorities have a much softer approach than the restrictions that were introduced in the summer on the territory of China, he added.
“The desire of the US authorities to regulate the crypto market and the turnover of digital assets more strictly has been traced for a long time. The SEC case against Ripple should have been a signal to the community, ” the analyst noted.
According to Mazur, in the near future, the US authorities should expect attempts to bring the crypto market into compliance with current legislation with the help of laws and courts.
In June, the cost of bitcoin fell to a local minimum of $28.8 thousand for the first time since January. This happened after the Chinese authorities banned the mining of cryptocurrencies in the country. Due to the mass relocation of miners, the hashrate of bitcoin decreased by more than 50%, to 68 Eh/s (exahashes). Now the hashrate is recovering after the fall and is 138.4 Eh/s, according to BitInfoCharts.
What can the SEC pressure turn into
Speaking about the SEC’s claims against the Coinbase crypto exchange, it should be borne in mind that the platform supplies the US authorities with tools for tracking crypto transactions, Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service, recalled. He also noted that in April of this year, Coinbase managed to successfully conduct a direct listing of shares on the stock exchange, which indicates that the company has no significant regulatory problems.
The situation with Uniswap is different, the expert believes. In his opinion, DeFi projects will have to cooperate with the US authorities, or form truly decentralized systems.
“The very interest of regulators in crypto exchanges and DeFi for participants of the crypto industry was not a surprise. By forming legal boundaries for the industry, development will be paved, ” Soshnikov added.
How will the regulator’s actions affect the market
The actions of supervisory authorities may weaken digital assets for a while, Mazur predicted. He is sure that the decline in quotations will be short-term, after which the cryptocurrencies will return to an upward trend. Mazur also admitted that the cost of bitcoin against the background of regulatory pressure in the United States may sink below $20 thousand, and this will be a good basis for the subsequent uptrend.
Such shocks in the digital asset market prepare the ground for the future development of the industry in accordance with the requirements of the authorities, so such events should be considered as a benefit, Soshnikov added.
Many successful investors apply the rule that during periods of maximum negativity it is necessary to buy assets, and during periods of maximum positivity — to sell them, explained Andrey Podolyan, CEO of Cryptorg. Therefore, it is now that large investors are making purchases, he says. As an example, Podolyan cited the government of El Salvador, which on the evening of September 7, during the fall of the main cryptocurrency to $43 thousand, bought 150 bitcoins.
“Now whole countries are involved in the game,” Podolyan concluded.