- Coinbase's long legal tangle with the SEC appears to be over.
- A bevy of bills on Capitol Hill will shape new rules.
- Bybit hack shows security risks still loom large for market.
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It’s over. Officially.
The first sign the US Securities and Exchange Commission’s crypto crackdown was well and truly finished came on February 11 when the agency asked a court to pause its enforcement action against Binance and Changpeng Zhao, its co-founder and former CEO.
On Friday, Coinbase did its rival one better when it said that the top US finance regulator agreed — in principle — to drop its case altogether.
Major cases
The day before, the SEC had said it was shuttering its major crypto cases pending a review of the sector by a new task force led by Commissioner Hester Peirce.
The agency also ended its effort to get platforms that enable the trading of cryptocurrencies to register as dealers, Kyle Baird reported.
Crypto critics acknowledged the obvious.
“Buckle up, get the popcorn, and get ready for the SEC funeral,” John Reed Stark, the former chief of the agency’s Office of Internet Enforcement and industry sceptic, wrote on Thursday.
So what’s next? Probably nothing. For all the talk about task forces and reviews, the SEC will most likely wait for Congress to act on a bevy of crypto bills under consideration.
Two bills
Two in particular have caught the eye of crypto founders and investors as potential landmarks, Andrew Flanagan reported.
A stablecoins bill would establish legal definitions and rules for dollar-pegged cryptocurrencies.
And a market structure bill would lay out jurisdictional responsibilities on digital assets for the SEC and the Commodity Futures Trading Commission.
The two agencies’ turf battles have long sowed confusion for investors and asset management firms. Now both regulators are expected to be led by pro-crypto allies.
To head the CFTC, President Donald Trump nominated Brian Quintenz, a former commissioner as well as an alum of Andreessen Horowitz, the Silicon Valley VC firm.
Paul Atkins, a Washington lawyer and onetime SEC commissioner, is expected to win Senate approval to lead the agency.
Victory
All of this adds up to quite the victory for Coinbase and the rest of the crypto industry. If the SEC had won its case, Coinbase would have been forced to delist every cryptocurrency that had not been vetted and registered by the agency.
Now CEO Brian Armstrong doesn’t have to worry about that monumental risk anymore. Still, crypto is fraught with other perils.
On Friday, hackers executed what is believed to be the biggest crypto heist ever by plundering more than $1.5 billion in Ether from Bybit, the Dubai-based exchange, Aleks Gilbert reported.
As speculation flew that North Korean hackers were behind the theft and fears mounted about crypto’s vulnerability, Coinbase’s shares outpaced a broader market selloff with an 8% plunge.
Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.