The recent lawsuit filed by the SEC against Coinbase, coming less than 24 hours after a similar action against Binance, has ignited widespread discussion and debate within the community.
Industry moguls, including Changpeng Zhao (CZ) from Binance and Jack Dorsey, have expressed their opinions on the news of SEC lawsuits, with CZ suggesting that if a company finds itself constantly involved in conflicts, it may be indicative of its own shortcomings.
The community reacts
On June 6, Coinbase, Inc. faced charges for operating its crypto asset trading platform without proper registration as a national securities exchange, broker, and clearing agency and for failing to register the offer and sale of its crypto asset staking-as-a-service program.
Shortly after the news, Gary Gensler tweeted a defense for this opinion, stating that the allegations against Coinbase suggest that the company’s supposed failures have resulted in investors being deprived of essential safeguards and protections.
These include rulebooks to prevent fraudulent activities and market manipulation, adequate disclosure of information, measures to prevent conflicts of interest, and regular oversight and inspection by the SEC.
Community members were quick to respond to this with rebuttals. @CryptoLawUS, founded by John E. Deaton, replied by stating, “1) Refuse to say what compliance means; 2) Approve their IPO knowing their business model; 3) Sue them for non-compliance. This is why the @SECGov has no credibility,” quickly pointing to a federal judge’s comments in the Ripple case, which was the first regulation enforcement action.
Others, including the @WolfofPoloniex, highlight Coinbase becoming public on the NASDAQ back in 2021 as a defense for the SEC’s allegation. It is worth noting, that in a June 5 tweet, The Wolf highlighted that Binance’s lawsuit being a civil one might be a blessing in disguise for the industry.
Miles Deutscher, a crypto analyst, reiterated this point of view in a June 6 Tweet, stating, “So you’re telling me that the SEC let an ‘unregistered broker’ IPO?”
Picking a fight
According to the SEC lawsuit that occured less than 24 hours earlier, Binance was accused of unlawfully soliciting customers in the United States to engage in trading activities on unregistered platforms.
As new news developed, Binance’s CZ suggests, “If you have to pick a fight with everyone, maybe you are the one at fault. 🤷♂️”
Jack Dorsey, the former CEO of Twitter, and current chief executive of Block, offered support in a Tweet that read, “Steady Lads.”
While Binance was quick to respond to these allegations on Twitter, Coinbase has remained quiet on the matter so far, with the exception of the chief legal officer, Paul Grewal, who commented on the ideal framework for clearer rules in a Tweet that went out June 5.
Although it may be too early to say if the SEC is picking a fight, the community’s comments shed interesting persepctives on the matter that should not be overlooked.