The Feds’ Crackdown on Cryptocurrency, Explained

The Securities and Exchange Commission (SEC) filed federal lawsuits against two of the biggest cryptocurrency marketplaces in the world within two days of each other: Binance and Coinbase.

The cases will likely clarify key questions over cryptocurrency regulation, an issue shrouded in legal and administrative ambiguity since its emergence: What oversight should regulators have over cryptocurrency? And should cryptocurrency be considered a security, akin to stocks or bonds? Or should it be categorized as a non-security, similar to tokens or currency?

The ‘security’ dispute.

The SEC oversees the buying and selling of securities, regulating brokers and clearinghouses, and requiring companies that issue securities to provide public disclosures. The SEC’s two-fold purpose is to protect investors from fraudulent practices and safeguard companies from exploitation.