A lawyer representing Ripple in its lawsuit against the US Securities and Exchange Commission (SEC) predicts that the regulator will soon target crypto exchanges, according to a recent tweet.
Ripple (XRP) attorney John Deaton has been extremely vocal on Twitter about the ongoing lawsuit between the SEC and Ripple Labs. As the lawsuit appears to be nearing its (hoped-for) conclusion, the defendants in the case are attempting to move forward with summary judgment on whether XRP is a security and whether the fair notice defense is viable .
However, the SEC was very proactive in keeping the discovery alive, causing more delays and triggering some of the harshest communications ever seen in a lawsuit of this magnitude.
Deaton’s tweet came shortly after the SEC proposed new rules requiring platforms to include the fair value of digital assets they hold for users on their balance sheets.
Why Crypto Exchanges Could Be Next
Deaton says this is the first step in a decision by the regulator to file complaints against these exchanges, and we could see cases as early as this summer.
The recent advisory issued by the commission appears to affect crypto exchanges, DeFi platforms, and custodial service providers in general. However, the advisory opinion did not provide the clarity longed for by the community.
Instead, the proposed rules add to the already complex and vague regulatory framework that protects the space. In the notice, the SEC highlighted several risks associated with protecting crypto assets and cited a 2020 report on stolen assets from crypto platforms in 2018.
However, the regulator also admitted that it had refused to provide regulatory clarity, despite several appeals over the years. In January, SEC Chairman Gary Gensler said the regulator would take a closer look at the changes in 2022.
Will the SEC exceed its scope?
While this admission may be the first step in a move to create a regulatory framework, there are fears the watchdog could expand the reach of its authority.
Recent hacks in the crypto industry have informed these new regulatory guidelines which align with statements Gensler has previously released, including users buying crypto on Coinbase who have made unsecured loans to the company. .
With the new guidelines, all digital assets held by investors on a platform would be considered assets of the platform. This will mainly affect the balance sheets of companies and put them under the scrutiny of the SEC.
Last year, Coinbase reported $21.3 billion in assets and liabilities on its balance sheet; well below the $278 billion in digital assets it held at the time. In accordance with SEC registration requirements, any company with more than $50 million in assets immediately falls under the jurisdiction of the SEC.
Thus, liquidity providers and automated market makers may have no choice but to register with the SEC if digital assets are added to their balance sheet. There are still other proposals, such as the inclusion of crypto market participants, especially in the definition of brokers or government securities brokers.
Ultimately, this means they will need to register with the SEC and comply with federal securities laws and regulatory obligations.
What do you think of this subject? Write to us and tell us!
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.
We would love to thank the writer of this post for this awesome web content
Ripple Lawyer Predicts SEC Will Target Crypto Exchanges Next? – Tech Tribune France
Discover our social media profiles and other related pageshttps://metfabtech.com/related-pages/