Gary Gensler finally has gotten his way as the legal debate continues over whether sales of cryptocurrencies constitute securities. I wrote about the Coinbase insider trading case a few months back, but now all eyes have been turned on that case as Ishan Wahi, and his brother have reached settlements with both the Department of Justice and the Securities and Exchange Commission. The third man, their friend—Sameer Ramani—remains at large.
The reason this case is so important is on Friday, a federal judge in the Western District Court of Washington issued a ruling in the case against Ramani. The ruling, which agreed in part to the SEC’s request for a default judgment, could have serious implications for both Ramani and the broader crypto industry.
In the decision, Judge Tana Lin ruled that the case fell under the SEC’s jurisdiction because the crypto assets at issue were securities, even though they were traded on Coinbase, a secondary market. The question about crypto being a security has been debated for several years and is the core argument for the SEC around their ability to regulate crypto. This may be the strongest decision by a federal judge to support Chair Gary Gensler’s argument that the vast majority of the industry’s activity falls under its rule.
So the real question is, should crypto fall under the category of securities like bonds and stocks, or commodities like gold and wheat? I think they need their own subset of regulations specifically designed for digital assets. It makes too much sense to figure out regulations for individual assets so it will never happen. Currently, the only crypto with regulatory clarity is Bitcoin, which the Commodity Futures Trading Commission declared to be a commodity in 2015.
Other assets have remained in a gray zone and Gensler with the help of the SEC has pursued a campaign of enforcement actions against crypto firms, arguing the firms are issuing or selling unregistered securities. With high-profile cases against companies like Ripple, Coinbase, and Binance, the SEC has sought to expand its jurisdiction over the vast majority of crypto assets, taking advantage of a lack of legislative movement in Congress. It’s been Gensler’s personal mission to put a strangle hold on the industry!
I’m worried that this cases decision will give legal precedent to Gensler which could be a catalyst for new regulation that puts a halt to this bull run.
Coinbase is really seems to be going down and it is looking like they are finding it hard to bounce back
Their stock has been pretty good lately.
It definitely sucks and I think it will have an effect on the crypto law suits. I am wondering if that company will appeal because it could get overruled, but I am not sure if they would want to throw all the costs down. I wish the SEC would stop getting involved but we can't control that.
They want power and it's at our expense. Markets are already erratic just look at the boom bust nature. I think this is a net negative for us.
Only time will tell
Wise words.
It really sucks whenever we hear about this crypto lawsuit and I guess this might affect some exchange
Yes regulation are an X factor for any bull run at the moment.
I thought it would have a much bigger impact on the markets than it seems to have. I think in a couple months Gensler isn't even going to be around anymore. I definitely agree that crypto needs its own set of regulations. Why try to fit it into something else.
Hopefully he is not around and we get someone who is a little softer on the issue. I think they are too lazy to make a new system.
I agree with you on all those counts!
The only way this will ever really be settled is someone appealing up to the Supreme Court. I'm not sure which way they would see crypto since most people above 50 are don't really understand what crypto is.
I don't see that happening anytime soon. That kangaroo court can't even figure their own issues.
Welcome to the new USA!
If there is a market bullish, everything will be recovered
It is natural that there will be lawsuits, because they do not like transactions in crypto