United States regulators including the Securities and Exchange Commission (SEC) have ongoing civil cases against major cryptocurrency firms including Binance, Coinbase, and Ripple, but not every company has been subject to the same treatment.
Gary Gensler, serving as SEC chair since 2021, has been widely criticized by many lawmakers and industry leaders for a “regulation by enforcement” approach to crypto companies and offerings. Some of the cases have ended up in federal courtrooms to determine what may qualify as a security in the United States, and not all judges’ decisions have necessarily been favorable to the regulator.
The commission filed a lawsuit against Ripple in December 2020 over XRP as an allegedly unregistered offering, but received a partial summary judgment in July that the token was largely not a security. Coinbase, which seemed to expect legal action ahead of the SEC’s lawsuit filed in June, targeted the regulator in response to its case, claiming the exchange tried to “come in and register” without success or proper feedback.
Prometheum, a crypto firm which gained a lot of media attention in June following co-CEO Aaron Kaplan testifying before the House Financial Services Committee on digital asset regulation, received approval from the Financial Industry Regulatory Authority as a special purpose broker-dealer (SPBD) for digital asset securities in May. Some of the firm’s subsidiaries, which also deal in digital assets, have successfully registered with the SEC.
“Prometheum was purpose-built to comply with federal securities laws and create the first digital asset security trading platform subject to those laws including investor protection rules,” Kaplan told Cointelegraph.
Kaplan’s approach would seem to suggest that certain firms like Coinbase, Binance, and Ripple launched services in the U.S. with the intention of trying to change existing regulations. Major players have sometimes lobbied for legislation favorable to crypto firms: Coinbase CEO Brian Armstrong has been a regular presence in Washington DC and encouraged users to back political candidates in support of pro-crypto policies.
According to the Prometheum co-CEO, certain crypto companies “have been working to rewrite or amend existing laws in their favor and to the detriment of retail investors”, speculating that the current frameworks are incapable of dealing with digital assets. Many industry leaders and lawmakers have echoed similar concerns,…
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