SEC vs. Coinbase, or one of the biggest legal battles in crypto 😳; Facebook’s Diem is being reborn and is one of the most interesting Layer 1 Blockchains ever 🤯; Growing tentacles of FTX 🦑
Good Morning FinTech, 28 July
Good day Everyone,
And happy Thursday! The week is approaching an end but it’s only getting hotter in here!🔥 Today we’re going to look at SEC vs. Coinbase, or one of the biggest legal battles in crypto (it can have a massive impact on the whole industry); Facebook’s Diem is being reborn in another clothing (& is one of the most interesting Layer 1 Blockchains ever), and the growing tentacles of FTX (how likely is their new acquisition?). Let’s jump straight into the interesting stuff:
SEC vs. Coinbase, or one of the biggest legal battles in crypto 😳
The Battle Begins 👀 The U.S. Securities and Exchange Commission aka the SEC, whose primary purpose is to enforce the law against market manipulation, is launching an investigation into whether crypto exchange giant Coinbase has allowed U.S. customers to trade digital assets that should have been registered as securities. I’ve briefly covered this earlier in the week but it’s too important to leave it as it is. Let’s go a bit deeper together.
The Bad Knight 🦹🏿 We must remember that just last week, the SEC alleged that at least 9 altcoins on the exchange fall under this category (= they are securities). This is also very much linked to the news that a former Coinbase employee has been charged with the insider trading of cryptocurrencies.
In simple terms, the SEC view is that almost everything COIN 0.00%↑ lists is a security and therefore insider trading in it is subject to SEC jurisdiction.
Will Coinbase rise? 🤔 Obviously, Coinbase disagreed with the charges and said it doesn't list securities. Paul Grewal, their Chief Legal Officer, added: I'm happy to say it again and again: we are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter.
But let’s ignore the details for now and look at the bigger picture. And the bigger picture is that this is arguably the biggest legal battle in crypto that might have a massive impact on the whole industry (beyond just the US). Here’s the takeaway: