https://sputnikglobe.com/20230608/crypto-kryptonite-to-governments-us-crackdown-on-binance-long-time-coming-1111008087.html
Crypto is Kryptonite to Governments: US Crackdown on Binance 'Long Time Coming'
Crypto is Kryptonite to Governments: US Crackdown on Binance 'Long Time Coming'
Sputnik International
The Securities and Exchange Commission (SEC) filed lawsuits against crypto exchange giants Binance and Coinbase this week after months of threats and warnings, with industry experts expecting the clampdown to spread to smaller exchanges. Crypto expert Paul Goncharoff told Sputnik why the crackdown makes sense, from the US government’s perspective.
2023-06-08T17:30+0000
2023-06-08T17:30+0000
2023-06-08T18:04+0000
economy
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binance
coinbase
us securities and exchange commission (sec)
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crypto
crypto market
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Institutional crypto-investors are on edge after starting the week with a massive piece of bad news - SEC lawsuits against two of the industry’s biggest exchanges.The lawsuit against Binance and its founder Changpeng Zhao includes 13 charges, including allegations that his exchange “subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform” despite a commitment to split the .com website from a separate .US site, which was marketed as a separate, independent platform for American investors. Binance is also accused of illegally offering clients commodity derivatives (financial instruments which enable investors to profit from commodities without owning them), and of allowing clients to buy and sell assets back and forth between their own accounts to simulate increased trade volume.Binance, which has over 28.6 million active users, blasted the SEC in a statement, accusing the regulator of turning to “blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology,” and emphasizing that US regulators’ reach is “limited,” since “Binance is not a US exchange.”Coinbase, another major crypto exchange, which has about 13.3 million users, was slapped with a lawsuit Tuesday accusing the company of similar violations, charging Coinbase with acting as an unregistered securities, securities broker, and clearing agency.The SEC “doesn’t really need all that much reason” to go after the crypto exchange giants, Dezan Shira & Associates management consultant Paul Goncharoff told Sputnik.“It’s been a long time coming, especially from the SEC,” the financial expert noted, given governments’ general hostility to cryptocurrencies as non-central bank-issued forms of money.The expert expects the clampdown to sting the crypto market, but also pointed to a trend among non-institutional investors, witnessed over the past year or so, to use “decentralized exchanges, which primarily are not based in the United States.”Of course there is a downside to the use of smaller, decentralized exchanges, which don’t have the same kinds of technical support as larger ones, Goncharoff said. But “one of the self-disciplining aspects of the cryptocurrency world is that you are entirely responsible for everything you do. And that’s a new concept. You know you make a small error, you can’t just erase it and go back. You made an error – that’s it, it’s gone. It’s in the blockchain, it’s already immutable.”Crypto Kryptonite to Governments“America is not the most crypto-friendly country,” Goncharoff said, elaborating on his point about the crackdown being a long time coming.While Goncharoff expects the clampdown to “frighten a bunch of people” invested in cryptocurrencies, particularly institutional investors, the crypto market can’t be sunk by SEC moves, he assures, with the news actually posing an “excellent buying opportunity” for long-term crypto pros. “You can see that on the hash rates in both the two major currencies – Etherium and Bitcoin,” he said.Keep Your Crypto Cash ColdAsked for advice on what steps crypto investors can take to avoid legal problems associated with government crackdowns, Goncharoff advised people not to leave investments they don’t want to lose on exchanges, big or small. “It is always good to obtain a ‘cold wallet.’ There are a number of them out there. And if you take a position (mostly people are long on the market) just bank what you don’t want to lose and put that in your cold wallet. And the amount that you’re going to be playing with, investing or speculating with, that you can leave on an online wallet – a reliable one, like Metamask or similar. There are a few out there that have stood the test of time.”Emerging in 2009 with Bitcoin, cryptocurrencies have taken the world by storm as an alternative to traditional, central bank-issued currencies for purchases, cash transfers, and as an investment tool, with institutional investors moving into the market in a big way in 2021, sending prices for major currencies on a rollercoaster ride of dizzying highs and crushing lows.Politics recently reinvigorated public interest in cryptocurrencies, with Democratic candidate for president Robert F. Kennedy Jr. recently praising Bitcoin as a “bulwark” against the “kind of government and corporate expansion and intrusion” that was shown by last year’s crackdown on Canadian truckers protesting Canada's Justin Trudeau government’s COVID-related restrictions –which included the seizure of protest leaders’ bank accounts. “As president, I will make sure that your right to hold and use Bitcoin is inviolable,” the candidate promised.RFK Jr.’s comments are the most outspoken support for cryptocurrency shown by a major national-level political figure in the US to date apart from Florida Governor Ron DeSantis, who has also expressed readiness to allow Americans to “do things like Bitcoin.”
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cryptocurrency, crypto, binance, coinbase, securities and exchange commission
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Crypto is Kryptonite to Governments: US Crackdown on Binance 'Long Time Coming'
17:30 GMT 08.06.2023 (Updated: 18:04 GMT 08.06.2023) The Securities and Exchange Commission (SEC) filed lawsuits against crypto exchange giants Binance and Coinbase this week after months of threats and warnings, with industry experts expecting the clampdown to spread to smaller exchanges. Crypto expert Paul Goncharoff told Sputnik why the crackdown makes sense, from the US government’s perspective.
Institutional crypto-investors are on edge after starting the week with a massive piece of bad news - SEC lawsuits against two of the industry’s biggest exchanges.
The lawsuit against Binance and its founder Changpeng Zhao includes
13 charges, including allegations that his exchange “subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform” despite a commitment to split the .com website from a separate .US site, which was marketed as a separate, independent platform for American investors. Binance is also accused of illegally offering clients commodity derivatives (financial instruments which enable investors to profit from commodities without owning them), and of allowing clients to buy and sell assets back and forth between their own accounts to simulate increased trade volume.
Binance, which has over 28.6 million active users, blasted the SEC in a statement, accusing the regulator of turning to “blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology,” and emphasizing that US regulators’ reach is “limited,” since “Binance is not a US exchange.”
Coinbase, another major crypto exchange, which has about 13.3 million users, was
slapped with a lawsuit Tuesday accusing the company of similar violations, charging Coinbase with acting as an unregistered securities, securities broker, and clearing agency.
The SEC “doesn’t really need all that much reason” to go after the crypto exchange giants, Dezan Shira & Associates management consultant Paul Goncharoff told Sputnik.
“It’s been a long time coming, especially from the SEC,” the financial expert noted, given governments’ general hostility to cryptocurrencies as non-central bank-issued forms of money.
“Initially, when cryptocurrencies were treated as commodities, things could get handled rather quickly and openly. But now that they’ve in their infinite wisdom decided to label certain cryptocurrencies as both equities and commodities, it’s totally confused the issue,” Goncharoff explained.
The expert expects the clampdown to sting the crypto market, but also pointed to a trend among non-institutional investors, witnessed over the past year or so, to use “decentralized exchanges, which primarily are not based in the United States.”
“So there is a growth curve that’s happening where the traditional centralized exchanges like Binance and like Coinbase will gradually find their niche among institutions. But the market at large I think will go more and more towards the decentralized exchanges that are not so easily rigged or dealt with,” Goncharoff predicted.
Of course there is a downside to the use of smaller, decentralized exchanges, which don’t have the same kinds of technical support as larger ones, Goncharoff said. But “one of the self-disciplining aspects of the cryptocurrency world is that you are entirely responsible for everything you do. And that’s a new concept. You know you make a small error, you can’t just erase it and go back. You made an error – that’s it, it’s gone. It’s in the blockchain, it’s already immutable.”
Crypto Kryptonite to Governments
“America is not the most crypto-friendly country,” Goncharoff said, elaborating on his point about the crackdown being a long time coming.
“Very few countries are entirely crypto-friendly because the concept of cryptocurrencies like Bitcoin or Etherium or Tether are rather threatening. Because they are loose cannons, they’re not controlled by a Federal Reserve, for instance. They can’t be politically manipulated, so it’s a growth curve again, of how people view [ideas like] what is value, what is the mechanism that can move value between persons or businesses or settlements,” the financial expert explained.
While Goncharoff expects the clampdown to “frighten a bunch of people” invested in cryptocurrencies, particularly institutional investors, the crypto market can’t be sunk by SEC moves, he assures, with the news actually posing an “excellent buying opportunity” for long-term crypto pros. “You can see that on the hash rates in both the two major currencies – Etherium and Bitcoin,” he said.
Keep Your Crypto Cash Cold
Asked for advice on what steps crypto investors can take to avoid legal problems associated with government crackdowns, Goncharoff advised people not to leave investments they don’t want to lose on exchanges, big or small. “It is always good to obtain a ‘cold wallet.’ There are a number of them out there. And if you take a position (mostly people are long on the market) just bank what you don’t want to lose and put that in your cold wallet. And the amount that you’re going to be playing with, investing or speculating with, that you can leave on an online wallet – a reliable one, like Metamask or similar. There are a few out there that have stood the test of time.”
Emerging in 2009 with Bitcoin, cryptocurrencies have taken the world by storm as an alternative to traditional, central bank-issued currencies for purchases, cash transfers, and as an investment tool, with institutional investors moving into the market in a big way in 2021, sending prices for major currencies on a rollercoaster ride of dizzying highs and crushing lows.
Politics recently reinvigorated public interest in cryptocurrencies, with Democratic candidate for president Robert F. Kennedy Jr. recently praising Bitcoin as a
“bulwark” against the “kind of government and corporate expansion and intrusion” that was shown by last year’s crackdown on Canadian truckers protesting Canada's Justin Trudeau government’s COVID-related restrictions –which included the seizure of protest leaders’ bank accounts. “As president, I will make sure that your right to hold and use Bitcoin is inviolable,” the candidate promised.
RFK Jr.’s comments are the
most outspoken support for cryptocurrency shown by a major national-level political figure in the US to date apart from Florida Governor Ron DeSantis, who has also expressed readiness to allow Americans to
“do things like Bitcoin.”
