The Securities and Exchange Commission (SEC) has been campaigning to regulate cryptocurrencies through enforcement for seven years, with no end in sight. Several major court battles are underway, which could decide whether Wall Street rules apply to digital assets. The SEC’s legal strategies, spearheaded by Chair Gary Gensler, have focused on big exchanges such as Coinbase, Binance, and Kraken.
In January 2024, Coinbase will ask a federal judge to dismiss the SEC’s lawsuit alleging the company violates fundamental investor-protection laws. Binance, an offshore exchange, is also seeking early dismissal of the SEC’s lawsuit, despite admitting to violating laws that require financial companies to have anti-money-laundering controls.
The SEC says cryptocurrencies can be securities even if they don’t contractually promise a share of profits or management’s ongoing efforts to boost their value. Some House Republicans are eager to create an alternative regulatory framework for digital assets, but key Democrats in the Senate are skeptical.
The SEC also has applications to launch exchange-traded funds that hold bitcoin. The agency under