SEC Chairman Gary Gensler has proven this contradictory over time.
Binance and Coinbase did not know how to leave the United States in time.
This article was written by Hernan Gonzalez. Disseminator of the crypto ecosystem. Volunteer at NGO Bitcoin Argentina. Creator of hernancrypto.com. Advanced student of Public Accountant at the National University of Rosario.
We have had extremely turbulent weeks in the cryptocurrency market. The main reason for this has been sudden decisions by the SEC (US Securities and Exchange Commission), in the United States, to advance the definition of cryptocurrencies as securities/non-securities, with the clear intention on Binance.US, the North American subsidiary of the Binance holding company and Coinbase, the San Francisco giant. The goal is for them to cease some of their operations (although ideally all) in the named country.
A conflict of power
It is not the first time this happens. We recently saw it with Kraken, another of the highest volume exchanges in the US and it turns out that the visible face of the “villain side” in the conflict It’s always Gary Gensler’sthe current chairman of the SEC, who has held that position since 2021 by election to the US Senate and proposed by President Joe Biden.
Just like “the bad guy” from a superhero movie, Gensler has shown its contradiction over time regarding his stance on cryptocurrencies.
At first in favor and then developing a fierce intention to “securitize everything within your reach”, with the sole objective that more and more assets remain under the decision orbit of the Securities and Exchange Commission, which he himself presides over.
To name just a few inconsistent actions in your walkthrough, here are two:
In 2018 Gensler as a professor in an MIT graduate course called “Blockchain and Money”, mentions that “three quarters of the crypto market are not initial coin offerings (ICOs) nor are they securities or securities, applying this same vision to the US, as well as to Canada and Taiwan”. This was part of his pro-crypto era, where he spoke with a degree of ease on the subject very different from today.
In 2019, Gary Gensler applied as a Binance advisor, the exchange with the largest market volume in the world, although it never ended up holding the position. What we do not know exactly is whether his application was intended to act as a government insider with first-hand information on the operation of the exchange, or if he truly intended to continue his career in the private sector.
The focus on companies
The CEOs and co-founders of the affected exchanges, Changpeng Zhao (CZ) and Brian Armstrong, were reluctant to agree to the SEC’s stipulation, but know they may have to withdraw at some point.
They could already smell that this series of attacks on the ecosystem would come sooner rather than later, although they did not know how to leave the country on time like other firms that, even when choosing where to settle, ruled it out from the beginning.
Of course, with the aforementioned I do not intend to defend the figure of the named businessmen. But without a doubt, there is a clear direction of the efforts for complicating or obstructing the development of the cryptocurrency sector in the US. by their government institutions.
All this without mentioning that the US government owns one of the largest bitcoin reserves in the world.
Coinbase, for example, spoke publicly about the situation with this video:
With Binance.US, the situation seems to have become somewhat more complex, especially due to the SEC’s intention to freeze user funds due to their “mismanagement”, which caused panic among users and apparently , the agreement not to do so has already been approved, but there are still other charges in the case.
a brief reflection
The SEC, in pursuit of having greater control over assets that can be used in a sovereign, pseudonymous and/or private manner without dependence on governments or companies, is looking to discourage at all costs its use in the North American country.
And what opinion does it deserve? I really consider these attitudes “slaps of drowning” state to mark territory, but whose consequences normally end up having a greater impact on the users of the platformsthe main victims of these power tug-of-war between large companies and governments.
And beyond the restructuring proposed by the US congressmen (who, even within the package of measures, also propose to remove Gary Gensler from his current position), it seems to me that US government decisions will continue on the same patheven regardless of who comes to power in the next presidential election.
Regular? So that?
I do not consider myself anti-crypto regulation. In fact, I always repeat the same thing: the word “regulation” should not be synonymous with extreme control, discouragement or hindrance. It can be regulated to promote the ecosystem and prevent abuse by exchanges on their users, for example.
But when the FTX crash happened at the end of 2022, Gensler already had more than a year in the SEC. And what happened there? Did no one notice what happened? Or were there “boughts” from Sam Bankman-Fried?
Anyway. The bids for power are constant. Even more so when your economy has been the world leader for decades, but you realized that you have begun to lose ground with a decentralized monetary sign like bitcoin, so you attack it to discourage its use and at the same time you proceed to accumulate it because you understand its intrinsic value.
All very coherent, luckily.
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