ALLEGATIONS. ALSO CRYPTO PLAYERS TAKING A HIT INCLUDING COIN BASE, MARATHON DIGITAL, RIOT AND MICROSTRATEGY. JOINING US GABBY CLUES, FORMER SEC SENIOR TRIAL COUNSEL HOWARD FISHER HOWARD, HOW SIGNIFICANT IS THIS MOMENT YOU THINK FOR THE CRYPTO SECTOR IN THE U.S. DOES THIS PLAY INTO THE HANDS OF BITCOIN MAXIMALISTS WHO SAY, HEY, THAT'S THE ONLY SAFE CRYPTOCURRENCY OUT THERE >> I THINK THE ANSWER TO THAT IS YES AND NO A LITTLE BIT. IN SOME WAYS THIS CASE IS JUST A REHASH OF SOME OF THE SEC'S GREATEST HITS. THEY MAKE AN ARGUMENT ABOUT A CONFUSION OF FUNCTIONALITY, THAT BINANCE IS AN EXCHANGE, A BROKER DEALER, A CLEARING AGENT THEY MAKE THE SAME ARGUMENT ABOUT SELLING UNREGISTERED SECURITIES AND LYING TO INVESTORS ABOUT RISK MANAGEMENT METRICS. I THINK WHAT MAKES THIS CASE MORE UNUSUAL AND WHICH BRINGS IT OUT OF THE LINE OF RECENT SEC CASES ARE THE EXTENSIVE ALLEGATIONS OF MARKET MANIPULATION THE SEC ALLEGES THAT BINANCE AND RELATED ENTITIES ENGAGED IN WHAT ARE KNOWN AS WASH SALES, TRANSACTIONS TO PUMP UP THE PRICE OF CRYPTO SECURITIES, AND BY DOING SO, THEY DID TWO THINGS FIRST, THEY GAVE THE ILLUSION OF LIQUIDITY AND WHAT MIGHT HAVE OTHERWISE BEEN AN ILLIQUID MARKET TWO, THEY PUMPED UP THE PRICE. IF PEOPLE WHO PARTICIPATE IN DIGITAL ASSET MARKETPLACES START TO BELIEVE THAT OTHER DIGITAL ASSETS MIGHT HAVE PUMPED UP PRICES AND MIGHT HAVE LIQUIDITY THAT DOESN'T REFLECT A NATURAL LIQUIDITY BUT IS THE RESULT OF BAD ACTORS PUMPING IT UP, I THINK EVEN FOR BITCOIN THAT'S GOING TO HAVE ADVERSE IMPACTS. >> OKAY. BUT GABBY, TO ME IT SEEMS LIKE -- IF YOU'RE BITCOIN OR A BELIEVER IN BITCOIN, IF YOU'RE COINBASE, YOU CAN EASILY ARGUE, HEY, THAT'S WHY YOU SHOULD BE WITH US BECAUSE BITCOIN IS BIG ENOUGH, IT'S TOO HARD TO MANIPULATE THE PRICE COINBASE WE'RE PUBLIC, UNDER EXTENSIVE SCRUTINY BECAUSE OF THAT, WE'RE FILING QUARTERLY THIS MIGHT BE TROUBLE FOR OTHERS, BUT NOT FOR US HOW DO YOU SEE IT? >> SURE. SO I KIND OF WANT TO REITERATE SOME OF THE CONVERSATION POINTS OF MY COLLEAGUE WHICH IS THAT I THINK WE'RE SEEING A BIT OF A REPLAY OF THE SEC'S GREATEST HITS I THINK ONE OF THE THINGS WE CONTINUE TO SEE IS AN EFFORT TO REGULATE BY ENFORCEMENT. I THINK ONE OF THE KEY PIECES IS THAT, YES, THE U.S. HAS ONE OF THE MOST VIBRANT AND LIQUID CAPITAL MARKETS. THOSE THAT SEEK TO PLAY BY THE RULES AND DEVELOPING RESPONSIBLY LIKE COINBASE, THIS IS A POINT WHERE THEY CAN DIFFERENTIATE IN TERMS OF MARKET AND ALSO DRIVE SORT OF A WEDGE BETWEEN THEIR COMPETITORS. I THINK ONE OF THE THINGS THAT IT WILL BE INTERESTING TO SEE MOST IMPORTANTLY IS THE DRIVE FOR RESPONSIBLE INNOVATION I THE SPACE. SO I THINK THOSE THAT ARE WATCHING, ESPECIALLY THOSE FROM INDUSTRY SUCH AS MYSELF ARE EAGER AND EXCITED TO SEE SORT OF THIS NEXT STAGE OF EVOLUTION AND MATURATION OF THE DIGITAL ASSET SPACE. >> HOWARD, THIS ARGUMENT ABOUT LEGISLATION BY ENFORCEMENT, IT SEEMS TO ME TO BE GETTING A LITTLE TIRED BUT I DON'T KNOW IF THAT'S HOW IT PLAYS IN THE EARS OF EXPERTS. TELL ME, A LOT OF THE CRYPTO INDUSTRY HAS BEEN SAYING DON'T REGULATE US TOO MUCH, DON'T REGULATE US TOO SOON LET US MOVE FAST BUT THEN, WE NEED CLARITY. THERE'S A LOT IN HERE THAT DOESN'T HAVE TO DO WITH THAT KIND OF CLARITY. IT'S JUST PLAIN ALLEGATIONS ABOUT FUNKY BUSINESS PRACTICES CAN THEY KEEP MAKING THE LEGISLATION BY ENFORCEMENT ARGUMENT TO ANY EFFECT >> THAT'S A GREAT QUESTION AND I THINK THAT THERE IS SOME ARGUMENT IN THAT THE SEC IS REGULATING THROUGH ENFORCEMENT BUT THE FACT IS THAT THE RULES ARE THERE, THE RULES EXIST AS THE SEC SAYS IN THE BINANCE COMPLAINT, THE RULES WERE NOT DESIGNED WHEN THEY WERE SET OUT TO COVER A SET LIST OF CIRCUMSTANCES. THEY WERE DESIGNED TO BE FLEXIBLE THEY WERE DESIGNED TO APPLY TO NEW TECHNOLOGIES AS THEY CAME OUT. THAT'S WHAT THE SEC IS DOING LEAVING ASIDE TOKENS SUCH AS BITCOIN WHICH UNDER ANY ANALYSIS ARE PROBABLY NOT GOING TO BE SEEN AS SECURITIES, IF YOU LOOK AT THE TRADITIONAL ANALYSIS, ALL OF THE COINS -- NOT ALL, BUT MOST OF THE COINS THAT ARE OUT THERE FALL INTO THE CATEGORY OF SECURITIES UNDER THEIR TRADITIONAL ANALYSIS THE REAL ISSUE HERE I THINK IS NOT THAT THE SEC IS OVERSTEPPING ITS BOUNDS BY BRINGING THESE CASES, BUT THAT CONGRESS IS FAILING TO ACT TO M
