In a twist that could make even the most seasoned bureaucrat raise an eyebrow, the US Securities and Exchange Commission (SEC) has found itself in a bit of a pickle with its lawsuit against Coinbase. It seems the newly minted Crypto Task Force is on a mission to untangle the spaghetti of prior enforcement actions against the exchange, as noted by the ever-astute John Reed Stark, a former SEC official who has seen more than his fair share of regulatory shenanigans.
On the 17th of February, Stark took to the X social media platform (where brevity is the soul of wit, or so they say) to explain the SEC’s rather audacious request for a 28-day extension to respond to Coinbase’s petition for permission to appeal. “According to the unprecedented 3-page joint motion,” he quipped, “the SEC’s review of crypto-related issues is ‘ongoing,’ which is bureaucratic speak for ‘we’re still figuring this out, folks!’”
In layman’s terms, Stark might as well have said, “Stick a fork in the SEC’s case against Coinbase, it’s done,” which is a rather culinary way of saying that the case might just be toast. 🍞
For those keeping score, the SEC decided to sue Coinbase back in June 2023, claiming the company was operating as an unregistered broker and exchange. Coinbase, in a fit of defiance, responded with the argument that crypto trades should not be lumped in with securities, which is a bit like saying that not all fish belong in the same barrel.
Stark, with the wisdom of someone who has seen the inside of a courtroom more times than he cares to admit, predicts that the SEC’s case against Binance is headed for a similar fate. He pointed to a joint motion from February 11, where both parties seemed to agree that the SEC’s Crypto Task Force “may impact and facilitate the potential resolution of this case.” In other words, they might just be throwing in the towel. 🏳️
And let’s not forget Ripple, which has been embroiled in a legal tussle with the SEC since 2020. Stark ominously warned, “Expect all crypto-related appeals, including the appeal of the Ripple matter, to pause or, more likely, to be fully withdrawn.”
Stark, who spent 18 years as the chief of the SEC’s Office of Internet Enforcement while moonlighting as a law professor at Georgetown University, now runs a consulting firm. One can only imagine the tales he has to tell over a pint of ale.
Crypto Task Force to Bring Regulatory Clarity
The SEC’s Crypto Task Force, which was established on President Donald Trump’s second day in office (because why not?), is being led by the pro-crypto Hester Peirce. She has vowed to clean up the “mess” left behind by the previous regime, which sounds like a job for a superhero, if you ask me.
It appears the task force is living up to its promise. Earlier this month, it convened with various crypto industry participants from both the blockchain and traditional finance realms, all clamoring for clarity on a plethora of regulatory issues, including guidelines for exchange-traded products, broker-dealers, and protocol staking. It’s like a regulatory potluck, and everyone brought their own dish!
The Blockchain Association, a group with nearly 100 members, has called on regulators to “review and correct erroneous interpretations of law” made by the SEC’s previous administration. Because nothing says “trust us” like a good old-fashioned review, right?
In addition to the Blockchain Association, the task force has also met with representatives from Nasdaq, Andreessen Horowitz, Multicoin Capital, Jito Labs, and Sullivan & Cromwell. It’s a veritable who’s who of the financial world, all trying to make sense of the regulatory maze.
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2025-02-18 19:57