More On: ripple lawsuit update
In the coming weeks, President Biden will nominate a former Ripple adviser to be the Fed's Vice-Chair for Supervision.
As part of its case against the US Securities and Exchange Commission (SEC), a lawyer for Ripple believes that the regulator will soon be targeting crypto exchanges.
- According to a Ripple attorney, the SEC will soon target cryptocurrency exchanges.
- John Deaton's tweet came shortly after the Securities and Exchange Commission issued its advisory opinion.
- The SEC explains why it is willing to expand cryptocurrency regulation in 2022.
XRP lawyer John Deaton has been very vocal on Twitter about a lawsuit that's been going on between the SEC and Ripple Labs. It looks like the lawsuit is coming to an end. The defendants to the case are trying to move forward with a summary judgment on whether XRP is a security and whether the fair notice defense is a good one.
As a result, there have been more delays and some of the most heated exchanges in a lawsuit of this size. However, the SEC has been very proactive in keeping the discovery process going.
Deaton tweeted soon after the SEC proposed new rules that would require platforms to put the fair value of digital assets they hold for users on their balance sheets, which Deaton thought was a good idea.
Coin trading could be the next thing to go, so why not?
First, the regulator is going to file a lawsuit against these exchanges, says Deaton. We could see a case this summer, and it could be a big one.
The SEC is making shit up as it goes. The war continues. I predicted an SEC lawsuit against one or more exchanges by the end of the summer. I still believe it. https://t.co/yqA3acfPmw— John E Deaton (@JohnEDeaton1) April 1, 2022
People who run crypto exchanges, DeFi platforms, and other businesses that store money are likely to be affected by the recent advisory from the commission. As a result, the advisory opinion hasn't been able to give people the information they need.
Instead, the proposed rules add to the already complicated and vague rules that protect the space. In an advisory, the SEC talked about how to keep crypto assets safe and cited a 2020 report on how much money was stolen from crypto platforms in 2018 and how to protect your crypto assets.
However, the regulator also said that it hasn't answered many questions about regulations over the years. In January, SEC Chair Gary Gensler said that the regulator would pay more attention to changes in 2022.
Will the SEC go over its bounds?
While this admission might be the first step in a move to set up regulations, there are fears that the watchdog will be able to do more.
These new regulations are based on recent hacks in the crypto industry, which is in line with statements Gensler has made in the past. Coinbase users who have made unsecured loans to the company in order to buy crypto are one example.
With the new rules, all of the digital assets that investors own on a platform would be owned by the platform, not the investors. A lot of the companies' balance sheets will be affected by this, and the SEC will now be in charge of them as well.
According to Coinbase's balance sheet from last year, it had $21.3 billion in assets and liabilities. This is far less than the $278 billion worth of digital assets it had at the time. Any company that has more than $50 million in assets has to register with the SEC. This means that the SEC has to keep an eye on it.
Digital assets might make it impossible for liquidity providers and automated market makers to stay out of the SEC's reach. Still, there are other ideas, such as including crypto market participants in the definition of Dealers or Government Securities Dealers.
Finally, this means they'll have to register with the SEC and follow federal securities laws and rules.
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