8th June 2023 > > The SEC.

tl;dr

The SEC (Securities and Exchange Commission) is displaying as many inconsistencies in its story as my soon-to-be ex-wife’s reasons for staying out all night on a regular basis.

Market Snap

Market Wrap

We have given up some of those gains made from yesterday’s short squeeze putting us right back into the middle of this lengthy and narrow trading range. As further evidence that the SEC’s actions are not a prelude to another FTX type event, Glassnode points out that BTC held at Binance has hardly moved:

Curious Cryptos’ Commentary – SEC vs Binance

These are the cryptos traded on Binance that the SEC alleges to be securities:

ADA

ALGO

ATOM

AXS

BNB

BUSD

COTI

FIL

MANA

MATIC

SAND

SOL

Two points to note.

Firstly, there are thousands of coins traded on Binance. Does this mean the others are not securities?

Secondly, BUSD is a stablecoin. The concept of classifying stablecoins as a security is somewhat nebulous at best as the Howey Test requires there to be an expectation of financial gain. If stablecoins are a security, so is the USD dollar, and all other fiat currencies, turning the global world of regulation on its head.

Curious Cryptos’ Commentary – SEC vs Coinbase

These are the cryptos traded on Binance that the SEC alleges to be securities:

ADA

AXS

CHZ

FLOW

ICP

MATIC

NEAR

NEXO

SAND

SOL

VGX

Again, there are thousands of cryptos on Coinbase, but what is interesting is that though all these coins can be traded on both exchanges (except for BNB and BUSD for obvious reasons, and weirdly NEXO), the list of securities is different.

I don’t know about you, but inconsistency in business is a major red flag for me.

Curious Cryptos’ Commentary – Coinbase vs SEC

We recently discussed (https://www.curiouscryptos.com/post/5th-may-2023-sec-and-coinbase) Coinbase’s petition against the SEC.

The essence of the petition is to force the SEC to give greater clarity to the regulatory landscape for cryptos. To date, Gary Gensler, Chair of the SEC, has not taken notice.

He might now.

Paul Grewal, Lead Counsel at Coinbase tweeted:

“Earlier tonight the Third Circuit issued a short order in Coinbase’s mandamus action today. The court noted the SEC’s suit against us this morning and asked the SEC whether that means the SEC has decided to deny our pending petition for rulemaking. The SEC has 7 days to respond.”

He continued:

“We appreciate the Third Circuit’s careful attention to this issue. Some may dismiss this as a small or obscure request that we’ve made to the court. But it matters not just to our industry – this is core to the proper working of government agencies and the way they engage with the public.”

Gensler is a man of forceful intent, but not even he can ignore the judicial system.