Published: June 6, 2023 │ 10:00 PM GMT
- The SEC has sued leading crypto exchange Binance.
- The SEC’s offensive also directly targeted Cardano.
- The regulator made many claims about Cardano in its official documents.
The US Securities and Exchange Commission (SEC) has launched an offensive against the crypto industry, setting its sights on two of the largest crypto exchanges in the country, Coinbase and Binance.
The SEC’s shot has sent tremors throughout the industry, with shrapnel hitting the crypto market and leading tokens like Cardano, Solana, and Polygon accused of being unregistered securities.
Caught in the Crossfire
On Monday, June 5, the SEC launched a high-profile lawsuit against Binance, accusing the exchange of mishandling customer funds and engaging in wash trading. The regulator listed ten crypto assets as unregistered securities in its complaint.
The SEC made many claims in the official document based on incorrect facts and conveniently neglected crucial information. One of its many claims it made was that Cardano’s three founding entities, IOHK, The Cardano Foundation, and Emurgo, owned the protocol.
Despite including an image of the Cardano roadmap, the SEC failed to mention the protocol’s commitment to decentralization, which includes using Stake Pool Operators (SPOs) and governance systems. The regulator also didn’t consider the upcoming Voltaire update, which aims to facilitate the transfer of control to the community.
Adding to its many allegations, the SEC emphasized that Cardano sold its tokens at an average price of $0.00024 each. However, it did not acknowledge the ICO took place in Japan and was not accessible to US investors.
Nevertheless, due to the SEC’s allegations, Cardano’s ADA token experienced a sharp 10% decline from $0.38 to $0.34. However, with the crypto community’s support, including the Cardano Foundation, the asset has since regained some of its losses. At press time, Cardano sat at $0.35.
The Cardano Foundation Responds
In response to the SEC’s accusations, Fedrick Gregaard, CEO of the Cardano Foundation, refuted all of the allegations. Gragaard expressed his disagreement, sharing:
“The Cardano Foundation disagrees with the recent qualification of ADA as a security under US law. We look forward to the continued engagement with regulators and policymakers to achieve legal clarity and certainty on these matters.”
Gregaard further affirmed that despite the regulatory turmoil, the Cardano Foundation remains dedicated to contributing to Cardano’s vibrant and diverse ecosystem.
Cardano Founder Charles Hoskinson also chimed in on the matter. He warned users the SEC was motivated by the emergence of a hidden agenda. Hoskison added that the recent string of actions would lead to the implementation of CBDCs in collaboration with massive banks to control citizens’ financial life and freedom.
The founder urged the crypto community to set aside its differences and unite to set guidelines that could prevent the US from slipping into a dystopian future.
On the Flipside
- Binance has denied the SEC’s allegations and plans to defend itself in court vigorously.
- US President Joe Biden has cited cryptocurrency regulation as a matter of national security.
- In a recent study, the White House explained cryptocurrencies held no fundamental value.
- The SEC sued Coinbase a day after accusing Binance.
- Not all US regulators and politicians are on board with the crypto crackdown. For instance, Florida Governor Ron DeSantis expressed views in favor of Bitcoin.
Why This Matters
The SEC’s decision to enforce action on leading crypto exchanges in the US could decide the fate of cryptocurrencies in the country. Its decision to classify assets like Cardano as securities can also cast a shadow of doubt and uncertainty in the market, pressuring exchanges to delist them or face the hammer.
Read what Charles Hoskinson has said about the Binance-SEC case:
Catch up on the aftermath of the SEC case:
This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.
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