Bitcoin whipsaws after SEC sues Coinbase and Binance in two-day span: CNBC Crypto World

today the SEC sues another major crypto exchange this time coinbase crypto markets whipsaw following the sec's latest enforcement actions and Corey clipston of swan Bitcoin breaks down the effect of that Crackdown on the industry and crypto prices [Music] welcome to cnbc's crypto world I'm Tanaya McKeel crypto prices are holding steady after the sec's announcement of charges against coinbase one day after the agency sued binance as of Newton Eastern Bitcoin Rose about one quarter of a percent trading around twenty six thousand dollars ether gained about a percent and finances BNB token was down by less than half a percent trading at around 280 dollars crypto markets initially tanked following the news on Monday that the SEC sued binance investors pulled around 780 million dollars from that crypto exchange and its us arm in a 24-hour period That's according to data from blockchain analytics platform nonsense expanding on the sec's continued Crackdown on crypto exchanges the agencies sued coinbase in New York federal court this morning accusing the crypto exchange of operating as an unregistered Securities Exchange broker and clearing agency today the SEC also charged coinbase for allegedly failing to register the offer and sale of its staking as a service program in the complaint the SEC argued that at least 13 crypto assets available to coinbase customers including Solana and polygons Matic token are considered crypto asset Securities earlier this morning the two tokens fell more than three percent and five percent respectively responding to today's development coinbase Chief legal officer Paul Grewal told CNBC in a statement that quote the sec's Reliance on an enforcement-only approach in the absence of clear roles for the digital asset industry is hurting America's economic competitiveness and companies like coinbase that have demonstrated a commitment to compliance he went on to argue that the solution is legislation that allows Fair rules for the road to be developed transparently and applied equally coinbase was warned of potential Securities charges back in March when the SEC issued the crypto exchange a Wells notice the next month coinbase sued the SEC asking a federal judge to force the regulator to share its answer on the company's July 2022 petition on whether existing Securities rulemaking processes could be extended to the crypto industry as of noon Eastern coinbase shares fell around 12 percent building on their nine percent loss from yesterday after the SEC unveiled charges against rival crypto Exchange Finance and its founder Chang Pang Xiao today we have more information on those allegations against binance and finance U.S yesterday U.S Regulators unveiled 13 Securities charges against the company and CZ alleging that binance had been engaging in the unregistered offer and sale of Securities and that Zhao and his entities had improperly co-mingled investor funds with the firm's funds the agency also alleged that the crypto Exchange inverted its own controls to allow institutional U.S investors to use binance's International Exchange rather than the US version which was supposed to be a completely separate entity in a Long blog post yesterday afternoon a finance spokesperson said that the firm had been actively cooperating with the sec's investigations and has worked hard to answer their questions and address their concerns but that the Agency quote abandoned that process and instead chose to act unilaterally and litigate the post also said that any allegations that user assets on the binance US platform have ever been at risk are simply wrong in a seeming rebuttal to binance's arguments the SEC tweeted a quote supposedly from binance in 2018 where they said internally we are operating an unlicensed Securities Exchange in the USA bro SEC chair Gary Gensler weighed in on the recent lawsuits against the two crypto exchanges speaking on cnbc's Squawk on the street this morning Gensler argued that the trading platforms are quote co-mingling a number of functions which in traditional Finance wouldn't be allowed we have concerns when and a platform like this puts themselves out to the public is consciously trying to evade U.S law and customer funds it's fundamentally a lack of controls deception conflicts and yes we're going to do that which we can uh in front of the courts and make uh to the extent we can uh the facts noun and the public protected all right let's keep talking about the sec's latest enforcement actions for our main story I spoke to Corey clipston the CEO of swan Bitcoin about these lawsuits and what they'll mean for coinbase binance and the price of Bitcoin I agree well thank you so much for joining us today the SEC is really ramping up their Crackdown with these lawsuits against finance and coinbase in the last 24 hours what's your reaction to the latest legal action here wow I mean what a surprise I actually just found out about the coinbase suit a few minutes before hopping on here um being out on the west coast and dealing with kids in the morning but um yeah I guess the biggest surprise for me honestly is just timing I've browsed through some of the top tweets and caught up on the content of it and it's it's basically what everyone expected um I think just the timing of it was sooner than most of the people I was talking to were expecting more like maybe as late as September possibly something like July or August so seeing it literally the day after the finance suit is uh pretty uh wild to see coinbase definitely the news of the morning but Finance happened just yesterday so let's break this conversation down into the two on the finance side of things the SEC and cfdc seem to be in pretty close agreement as to the allegations that a violated U.S laws and allowed U.S customers how significant is that case against Finance yeah so even on on first glance it looks like the binance case is significantly uh worse for the defendant than the coinbase case uh in binance's case they included the founder CZ Brian Armstrong not named in the coinbase suit and uh the seeking of immediate relief so that's the kind of a 48-hour process I guess would be 24 hours into that so they're trying to shut down Finance us immediately and then you know the details are in there that uh because binance and binance us were not separate the SEC wants to see you know down to the penny down to the Token I guess uh the books of Finance the international organization and so some kind of refusal to comply with that would basically put CZ in a position where you know he'd be facing charges and probably couldn't go to Nations that are friendly to the US and have extradition and things like that um and it would probably roll out from the US as kind of the the the example for how to deal with regulations in financial markets there are a lot of countries that would essentially follow suit and do whatever the US did to binance International as well so that's that's my opinion of what may happen um but yeah scary times for CZ for sure luckily he bought 145 million dollar yacht so he can maybe jurisdiction hop on that thing on the other side of this is coinbase they've been ramping up their battle with the SEC ever since the wells noticed the agencies served the company earlier this year coinbase coinbase has been vocal about their belief that they've done nothing wrong here and they're trying to fight the sec's approach how successful do you think that that pushback will be my take is that it was always doomed and that the signs of how all of these altcoins all the non-bitcoin cryptos were going to be treated was actually out uh back in February of 2018 when Jay Clayton said that they were all going to be Securities basically um so I don't think that there's much surprise here uh other than in the the kind of the people rooting for the crypto industry from the from the inside so the Insiders that make the money basically obviously are rooting for their team but I don't think there's anything surprising here in particular I think they deliberately and very specifically called out ethereum staking as being an offering of a security and we know this has been the lifeline for coinbase this is the this is the recurring Revenue that companies dream of having and so they've been basically in bed with consensus in the ethereum foundation basically the uh the management team of ethereum uh trying to push that really hard and getting a nice healthy Revenue rip off of the ethereum staking I think coinbase has something like a fifth of all ethereum on their platform doing the staking thing which is basically an interest bearing account yeah and that lack of a surprise you know the news really hitting coinbase shares but not so much prices of cryptocurrencies because I think a lot of people like you said are not that surprised you're a us-based business out of California as this latest Crackdown from the SEC changing how you think about operating in the US or more broadly do you think it makes similar exchanges or businesses rethink their U.S operations we saw it in Canada with okx and finance as it changed its regulations yeah so it was a deliberate Choice when when we started Swan to be Bitcoin only because that was the only one that was definitely a commodity and never going to be called a security and so feel completely comfortable operating in the USA headquartered in in Los Angeles and I don't see any reason to change anything really about our business model I think you know the the one thing that we're thinking about now is oh my gosh we're going to be able to advertise and we're going to be able to Market and we're not going to get choked out of the auctions on Google and you know Facebook ads and Facebook network uh by the crypto casinos overpaying for for Bitcoin words so that they can go and convince people to trade all coins so I think that's really exciting and creates an amazing opportunity for uh promoting and helping people understand Bitcoin and kind of presenting the truth about Bitcoin uh as opposed to the Affinity marketing scams that the crypto people have been promoting for the last few years and go go a little bit further than that for me you know the the complaint this morning that the SEC filed against coinbase outlined those 13 Chris crypto assets that could be deemed crypto asset Securities is I think what they were calling it uh you know of course Bitcoin not listed in that is that ultimately good news for Bitcoin I mean honestly it's good news for Humanity I think just very clearly delineating this one thing has no centralized issuer and is a commodity and these other things are essentially a new kind of company and this is a new kind of stock you know that's essentially what uh ethereum and cardano and ripple and all of these things are right they were created out of thin air by some company they had a pre-mind they were marketed and they were sold in a Securities offering and just being very clear about it I think is probably the right way to go at least it's the fair way to go you know you can argue about whether the SEC should exist or not but given that it does and given that it you know creates Capital markets that allow coinbase insiders to sell billions of dollars worth of stock and buy nice homes in the Hills you're basically a hypocrite if you want it for thee but not for me all for crypto world today but we'll be back again tomorrow so we'll see you then [Music]

Channel: CNBC Television

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Keywords: crypto world, cryptocurrency, bitcoin, digital currency, CNBC, business news, finance stock, stock market, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, stock market news, stocks, crypto investing, crypto, NFTs, mining, crypto mining, bitcoin mining, crypto industry, ether, U.S. currency, U.S. economy, cryptocurrency news, FTX, Bitcoin, Coinbase, Genesis, blockfi, NFT, Celsius, Binance, Robinhood, crypto news

Id: xpnnR-qzdl0

Length: 11min 44sec (704 seconds)

Published: Tue Jun 06 2023