What Does SEC’s Action Against Kraken Mean for Bitcoin and Ethereum, though?
Bitcoin continues to stay firm over $21,000 despite the Securities and Exchanges Commission’s (SEC) recent decision to stop staking at Kraken, a well-regulated US-based cryptocurrency exchange. The SEC’s move caused Ethereum’s ratio to drop slightly from 0.072 to 0.068 BTC, but it doesn’t appear to have had much of an effect on Bitcoin.
Are the Staking Services on Coinbase Securities?
According to Coinbase, the SEC solely regulates via enforcement because its staking services are not considered securities. As a result, the SEC’s enforcement actions may be distinguished, and no action was taken against staking as a whole, only against Kraken’s particular staking.
Stablecoins and Binance for USD
The latest move against Binance’s bUSD is strange because there is no distinction between it and USDc, while the latter still running unabated. Some have speculated that the Biden administration may be seeking retaliation against Binance as a result, although this is only conjecture.
Why Did Paxos Not Defend SEC?
It begs the issue of why Paxos didn’t take on the SEC or the New York Department of Financial Services when $16 billion in USD was at stake (NYDFS). A recent Proof of Keys run by Binance and the current bad market may have left several cryptocurrency firms short on finances, despite the fact that hiring attorneys may seem like a tiny expense.
Coinbase Gets Ready for Wet Days
Since learning the value of having a financial safety net, Coinbase has amassed billions in funds to be ready for any regulatory obstacles. The threat of regulatory monopolies is there here, but it only pertains to the US.
US Blockchain Organizations Navigate Regulation
By distinguishing themselves from the precise activities conducted, certain US crypto firms have been able to skirt the SEC’s regulation and enforcement. The SEC requires a judicial decision from a higher court, such as the Court of Appeals or Supreme Court, or a statute approved by Congress, in order for it to be enforceable. District Court decisions are essentially meaningless since they are not final and frequently change.
The SEC is not yet passing legislation; instead, they are settling with as many parties as they can because there has not yet been a higher court decision on any significant matter relating to the crypto area. Bitcoin and Ethereum are unaffected by the SEC’s proceedings against Kraken and Paxos’ stablecoin since they do not apply to staking or stablecoins in general.
In conclusion, the crypto sector will continue to exist and distinguish itself if the SEC attempts to control through enforcement. When you’re compelled to dance, you may as well take in the music, as the expression goes.