“Digital currency is here to stay, and it’s only a matter of how long before governments embrace it.” -Brad Garlinghouse
The battle of the SEC vs Cryptocurrency related agencies has been going on since Bitcoin was created. “Internet Money” caught their eye, but didn’t grasp full attention until Bitcoin’s value started to drastically rise, along with Ethereum and Ripple establishing their networks, bringing the rest of the industry with them. A desire to form a regulatory framework was sparked. It was then catalyzed by the Shavers vs SEC incident in 2013 when a ponzi scheme was unveiled, teasing returns on Bitcoin investments. This gave regulators a sour taste for the new asset class and set in motion an endeavor to regulate the market and keep investors safe.
It wasn’t until the industry was in full bloom, however, when regulators in the US started to take much more aggressive action on an industry they were still uncertain about. They saw that the movement was in full swing and that this technology was about to take over. They had to do something.
An Attack on Crypto
It was in 2020, just before the major bull run and NFT boom of the early 2020s took off, when the SEC filed a lawsuit against Ripple. It’s now the longest active lawsuit against any agency in cryptocurrency. We spoke in greater detail on the matter in Part I. The point was made, and still holds today, that the SEC wasn’t just making a case against Ripple and XRP, but against cryptocurrency as a whole.
This started a direct attack on crypto and any major player they could go after. There have been a variety of actions taken against crypto agencies over the past few years, many would say unjustifiably so- excluding the cases of blatant criminal activity. Some notable cases include:
- SEC vs Ripple (Dec 2020)
- SEC vs Uniswap (April 2023)
- SEC vs Binance (June 2023)
- SEC vs Coinbase (June 2023)
- SEC vs Kraken (Nov. 2023)
- SEC vs Consensys (Metamask) (June 2024)
These are the major ones excluding the cases against Gemini, Robinhood and Open Sea, which were all previously dropped. Millions of dollars. Thousands of hours. Probably literal tons of paperwork. These lawsuits have done absolutely nothing good for either side, and they have done absolutely nothing to better the experience for investors. If anything, these endeavors have proved useless and harmful to the space overall.
Oh, How The Turns Table
The attacks may have been vicious and unjustifiable, yeah. They may have wasted a plethora of time, money and resources, yeah. Did you see the outcome of all but 2 of the cases though? Oh, how the turns table.
With so many lawsuits being dismissed, especially with the more recent ones of Coinbase and Kraken, we’re starting to see a shift in the attitude these regulators have towards the decentralized markets. Do they know what’s coming?
Looking Ahead: Reserves and A New Economy
Did they just want to shake down the big players to get their piece of the pie and load bags before this all takes off? Who knows. Either way, crypto is winning and it looks like US regulators are starting to see the light. They could only drag this on for so long… Now we wait and see what happens with Binance and Ripple- Binance being the biggest player in exchange volume, and Ripple holding XRP as the 3rd largest currency by market cap. Monumental shifts are upon us.
We have already been promised a crypto reserve by this new administration. Although the pump hasn’t quite come as expected, it looks like more institutions and government entities are more and more bullish on the economy to come. The current market doesn’t seem to agree with that statement though. WTF is going on? You may ask. Well, looking ahead, it looks like big changes.
In Conclusion
The tides are turning. Speculation and hope are somehow both up. While at the same time crypto prices and regulatory pressure are somehow both down. What a time to be alive. The SEC over the past few years has been fighting to get a grip on how they’re going to regulate these markets. It seems like the whole industry has proved to be overall in good standing, minus the rug pulls. Now we just wait and see where it all goes. A happening could very well be upon us.
