Coinbase has always been an image of a good student in the cryptocurrency industry. It has been smooth in the process of compliance and listing, and coinbase has also become the overlord in the field of cryptocurrency trading platforms. But recently, Coinbases expansion of lending business has attracted the attention of the SEC (U.S. Securities and Exchange Commission), and threatened to face SEC lawsuits if it continues to advance. On September 8, the US encryption exchange coinbase issued a document claiming to have received a Welsh notice from the SEC for its loan business. For the SECs decision, Brian Armstrong, the founder of coinbase, expressed his strong dissatisfaction with the SEC. He posted 21 consecutive tweets on Twitter, accusing the SEC of inaction throughout the process and the unfair treatment of Coinbase. Brian Armstrong said litigation should be a last resort, not a first resort. Thank you for the support of the Roast Boy Creators Alliance!
From Brian Armstrongs Twitter content, we can roughly see the following two points:
1. Coinbase has communicated with the SEC in terms of compliance, and Coinbase has also made rectifications in related aspects, but it still has not been approved by the SEC, and there is no written statement;
2. Many existing encryption companies are providing lending services, but coinbase has not been approved. Brian Armstrong believes that coinbase has been treated unfairly.
Ripple, which has been plagued by SEC lawsuits, can be said to empathize with Coinbases recent encounters. The SEC alleges that Ripple’s founders conducted $1.3 billion in unregistered securities to sell Ripple since 2013. The relevant cases are still under trial and have not yet been finalized. When it was concluded that Coinbase was about to face charges from the SEC, Ripple’s official Twitter also expressed its support, posting that “the question is who can organize the SEC”.
Subsequently, on September 10, there was news that Coinbase had relisted Ripple (XRP) in the market. However, in the end, Coinbase clarified this news, saying that Coinbase has temporarily removed the trading of XRP, but some technical problems caused some users to still view the XRP market on the client terminal, but they could not trade.
Regardless of whether Coinbase will re-list Ripple in the short term, under the high-pressure policy of the SEC, Coinbase and Ripple are the same brothers and sisters, and they both chose to be tough. Perhaps in the future, the two teams can exchange experiences on how to deal with the SEC. As the saying goes, the enemy of my enemy is my friend.
This time, Coinbase chose to be blatantly tough, and the pressure on the SEC is obviously not small. On the one hand, in this incident, the reasons given by the SEC are indeed not sufficient, and even a bit prevaricated; on the other hand, the SEC has not yet perfect laws to follow in terms of cryptocurrency regulation, and the SEC’s enforcement is also a bit based on feeling the meaning of. At present, in the cryptocurrency lending business, many companies are already operating this type of business, but when it comes to Coinbase, it is considered a securities business, which is obviously unreasonable.
In recent years, the cryptocurrency market has ushered in rapid development, and the SECs business has also become relatively busy. It has opened the mode of collecting fines and has become the biggest winner. According to incomplete statistics, from 2017 to 2020, the SEC sued at least 32 cryptocurrency projects and received a fine of more than 140 million US dollars. Among them, most projects choose to spend money to eliminate disasters and pay fines to continue their lives. However, there are also those as tough as Ripple. For the project side, it is obviously more cost-effective to spend money to continue life, because it has already earned it back in the bull market.
However, due to the strong forces led by Coinbase and Ripple, the SEC’s fine collection model may become invalid in the future. In the Ripple case trials so far, the SEC has not gained an advantage, and the two sides are still deadlocked. If the Ripple case wins in the future, it will open a precedent, and this case will also become a typical case in the currency circle, marking that the days when the SEC used its rights to wantonly plunder the cryptocurrency market are gone forever. If the encryption companies sued by the SEC all choose to be tough, it is estimated that the SEC will not be able to handle it.
In addition, if the SEC continues to maintain high pressure on cryptocurrency regulation, it will also force some cryptocurrency startups to consider moving their headquarters away from friendly countries outside the United States, and the SEC will also lose a fortune. In fact, the introduction of relatively loose and complete cryptocurrency regulations is the best way to solve the current problems.
