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Bad news: your favorite tokens may well have become illegal, at least in the view of a certain well-known regulator.
Will the SEC Soon Ban Cryptocurrencies?
Bad news for crypto: not satisfied with its last dragnets targeting the industry, the SEC has struck again!
In fact, according to a May 8 Wall Street Journal article, the agency has announced that 76 cryptocurrencies are unregistered brands. In other words, they are now illegal, primarily because they can’t trade under any existing American financial law.
Among the assets concerned here, one finds familiar names that regulars deem harmful to their users. That’s particularly true in the case of TerraUSD or FTT. However, many of the most well-known tokens, such as Ripple and Dash, also turn up on the list.
Another problem on the horizon: a large portion of these tokens are listed on exchanges. This foreshadows possible future attacks from the SEC. Even if the agency has already taken action against Kraken and Binance faces the wrath of regulators, other enterprises might have to face even worse.
They could even end up subject to a ban. In fact, since one could accuse them of doing illegal business and of having risked investors’ fortunes.
What Will Happen to Crypto Now?
The SEC’s decision could have a significant impact on Ripple. Notably as it applies to the legal proceedings that have pitted it against the US regulator for the last three years. With XRP officially illegal, the SEC could cut short the legal proceedings and definitely declare Ripple at fault.
However, from a more optimistic standpoint, we might note that the big tokens like Bitcoin and Ethereum are not concerned here. It is thus possible that they could be use freely. But, equally, that it is only a matter of time before the SEC gets around to them.
Finally, we might note that the American regulator has at last come around to clarifying its rulemaking regarding cryptocurrencies. This could finally help businesses adhere to the applicable laws . . . and thus de-escalate the situation.
Thus, we may be on the cusp of sweeping changes in the industry. With the passage from the simple banning of certain tokens, to the closing of societies.
The moral of the story: the struggle against the SEC is only beginning!