SEC sues Binance and Coinbase: Here's a breakdown on the lawsuits and what it means for crypto

yeah let's get to our top story of the day though the Securities and Exchange Commission ramping up its Crackdown on crypto just one day after filing a lawsuit against binance the SEC is now targeting coinbase we've got team coverage on this Alexis Keenan is with the details on the charges and Jared blickery is keeping track of the market reaction Alexis we want to start with you lay out the sec's case against coinbase for us sure Akiko so let's just first say these two suits they target these major crypto platforms that have been in this long dispute with the SEC over its regulatory authority over both the exchanges as well as cryptocurrencies in general now the SEC says that both companies are violating U.S Securities laws by failing to register with the agency as for coinbase the agency says that the company is also illegally merging Market functions that are normally kept distinct from each other they say it's acting as a broker an exchange a clearing agency and also a seller of Securities they say as a result coinbase is then evading disclosure laws that were specifically set up to protect consumers by Congress now as for the case against binance it's similar but it's a 14 count complaint compared to the sec's five count complaint against coinbase in the binance case the SEC names both the company and the CEO Chiang Peng Zao it's a 14 complaint saying that the company illegally commingled customer assets also and misled customers as to the company's ability to detect Market manipulation they also said that the company was allowing U.S customers to trade on exchanges that were off limits to U.S uh Traders uh as for coinbase it's already been talking a lot about this case it's CEO Brian Armstrong said the suit might help get some clarity around crypto rules in an email separately to Yahoo finance its general counsel accused the SEC of relying on an enforcement only technique saying the solution is legislation that allows for fair rules of the road to be developed transparently and applied equally and not litigation they don't like this route but Brian Armstrong there seeming to say that perhaps if it's got to be litigation that maybe there's some rules that will come out of it or some distinctions that these companies can follow but look guys this is the 14th case that the SEC has brought against uh crypto entities since January so they are definitely on the offensive here they certainly are on the offensive right now right Alexis thanks so much let's take a look at how we are seeing the response play out in the market because coinbase under a bit of pressure here Jared but when you take a look at Bitcoin it's actually holding up pretty well well yes uh Up Up and Away here let me just show you what's happening today this is over the rolling 24-hour period up four and a half percent uh looks like 25 000 which is actually a little bit below here was a floor that's a big historical area for Bitcoin uh but we can see it is not yet reclaimed yesterday's high and so this is factoring also the news we got yesterday from binance now overall these are two of the biggest players in crypto so you might be asking why would why did not Bitcoin suffer a little bit more because uh that would be the natural inclination but I just want to show you a three-year timeline of Bitcoin and the various prices I've got some uh some SEC news in here some coinbase news I'm just going to go over a couple but first Ripple was in the SEC spot Spotlight in December of 2020 so this goes back a long time here's where coinbase listed on the NASDAQ in early 2022 and then here is actually where they got their first little hiccup coinbase drops plan to launch crypto lending program well they were in discussions with the SEC for a long time they wanted to offer interest to their customers on their accounts the way uh well you could do that around the world but not necessarily in the U.S they dropped that program but what we later revealed what was later revealed was that coinbase actually got a subpoena or multiple subpoenas for their efforts you go to the SEC Palms up and you're asking for help guess what you get a subpoena and return this is not new enforcement procedures or new procedures for the SEC this came out about a year later and of course by that time we'd already seen the downfall of crypto FTX was in the crosshairs lots of things were happening but I want to point to something else coinbase got a Wells notice and that was in March of 22 2022 actually and so that was uh that was actually the first thing though that should be 2023 by the way that was the first signal that there were going to be was going to be some kind of probe by the SEC on the other side so this is just kind of confirmation with a lot of investors were already thinking but my bottom line here is if the SEC doesn't completely shut down binance and coinbase uh probably not going to derail crypto but if in fact the coinbase business model cannot survive with SEC regulation that would probably take a long time to play out well that's a different story altogether I said no question that the SEC is on the offensive right now Jared blickery thanks so much

Channel: Yahoo Finance

Views: 3,536

Keywords: Yahoo Finance, Personal Finance, Money, Investing, Business, Savings, Investment, Stocks, Bonds, FX, Currencies, NYSE, Equities, News, Politics, Market, Markets, Yahoo FInance Premium, Stock market, crypto, Binance, Coinbase

Id: U0T63uMdBLY

Length: 5min 8sec (308 seconds)

Published: Tue Jun 06 2023