The crypto market ended last week while in the red, thanks to the Securities and Exchange Commission’s (SEC) lawsuits against top trading platforms Coinbase and Binance. The agency alleged that the two had violated several securities laws.
The SEC’s recent crypto crackdown prompted discussions on Crypto Twitter. Here is what was discussed.
Last Monday, after the SEC charged Binance, crypto fanatic and Twitter user @oxMert wrote that it was time for the agency to quit enforcement actions and clarify securities laws. He feared that the crypto industry in America could die soon if the SEC continued its regulation-by-enforcement approach.
That day, Cardano founder Charles Hoskinson also shared his opinion regarding the lawsuit against Binance. According to him, the US government is looking to discourage crypto innovations in the country in order to introduce a Central Bank Digital Currency, which it can control.
Meanwhile, crypto lawyer James Murphy claimed that the SEC’s petition against Binance.US may have given a clue as to why the firm’s former CEO, Brian Brooks, left his role after serving for just three months. Murphy explained that Brooks testified against Binance CEO Changpeng Zhao (CZ) in the SEC’s suit, accusing CZ of breaking the promises he made during the recruitment process. Brooks said Zhao assured him of running Binance.US independently, but that was never fulfilled, so he resigned.
On Tuesday, Zhao launched a Twitter Poll, asking his followers to vote on who protected them more between Binance and the SEC. 84% of the 319,000 voters chose Binance.
Crypto Fans Vs. CNBC Journalist Jim Cramer
That day, CNBC journalist Jim Cramer attempted to cause panic among Binance users, asking them to withdraw their funds from the platform as they were being commingled. His statement did not age well as he expected. Many called him out for spreading FUD. A notable comment came from Erik Voorhees, the founder of DeFi protocol ShapeShift. He said Binance was more solvent than any American bank and could easily handle a bank run.
On Wednesday, Twitter’s former CEO, Jack Dorsey, shared a controversial take regarding Ethereum. A Twitter user @merruX asked if ETH was a security, and Jack replied, “Yes.” Most of the users that commented disagreed with him.
Meanwhile, Coinbase CEO Brian Armstrong tweeted that his company was ready to battle with the SEC in court. In a long thread, Armstrong wondered why the agency allowed Coinbase to go public in 2021 if it believed that the tokens listed on the platform were securities. The CEO is confident that his crypto exchange will emerge as the winner in the legal battle.
Later that day, the co-founder of crypto exchange Gemini, Cameron Winklevoss, wrote that nowadays, when the SEC sues you, it means you are doing something right. Binance’s CEO saw the tweet and replied that the agency did not sue FTX, suggesting the SEC might have been aware of the fallen crypto exchange’s dirty dealings.
On Thursday, US Senator and crypto proponent Cynthia Lummis shared her statement on the SEC’s Coinbase lawsuit. The lawmaker called out the regulator for failing to provide legal guidance on what differentiates a commodity from security and instead continued to rely on regulation by enforcement approach, which according to her, is harming consumers.
Gensler and Zhao’s History Revealed
On Friday, Twitter user @FrankChaparro revealed that the SEC chair Gary Gensler and Zhao had a history. In a long thread, Frank Chaparro explained that Binance’s lawyers from Gibson & Dunn law firm had filed a court document proving Gensler applied to serve as the crypto exchange’s advisor in 2019. According to the document, Gensler and Zhao met for lunch in Japan to discuss his role at Binance before the US government appointed him to his current post.
On that day, Zhao tweeted to dismiss claims from crypto news website, Coindesk that he directed Binance.US to transfer $12 billion in user funds to his company called Merit Peak. He said the trading platform has never held such an amount.
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