The SEC's lawsuits against Binance and Coinbase raise concerns in the encryption industry

Recently, the U.S. Securities and Exchange Commission ( SEC ) filed lawsuits against two major encryption currency trading platforms, attracting widespread attention within the industry. SEC Chairman Gary Gensler ( has held a skeptical attitude towards encryption currencies for many years, and this lawsuit is seen as a substantial action he has taken.

Gensler has previously hinted multiple times that the proof of stake )PoS( tokens are classified as securities and believes that all cryptocurrencies except Bitcoin meet the Howey test )howey test( criteria. This simultaneous lawsuit against the world's largest cryptocurrency exchange and the largest publicly listed cryptocurrency company shows that the SEC is fully prepared.

These lawsuits may ultimately be appealed to the U.S. Supreme Court. The lawsuit against a certain trading platform may prompt Congress to take action on encryption currency regulation. Broader allegations against another platform, if proven true, could deal a heavy blow to this highly profitable company.

Some legal experts and industry observers have expressed their views on the direction of the case and its impact on the industry. Some believe that the situation of a certain trading platform is relatively favorable, as it has been striving to comply with SEC regulations, while the SEC has refused to provide support on compliance issues. This may lead the court to question the SEC's actions.

There are also views that these lawsuits are not entirely a bad thing. They may prompt Congress to realize that the SEC's current enforcement regulatory approach is not working, thereby driving comprehensive legislation to prevent the entire industry from fleeing to regions with looser regulations.

In the short term, unless the SEC wins, these trading platforms may maintain the status quo. However, in the long run, if the SEC wins in the Supreme Court, the future of the encryption industry will depend on the SEC's intentions. If it wants to destroy encryption, it may be able to achieve that with support from Congress. However, it is more likely that the SEC will eventually realize that it must take its regulatory responsibilities more seriously.

Some experts criticize the SEC for failing to issue coherent and consistent regulatory regulations for encryption assets, instead regulating and confronting the industry through enforcement. This may make industry participants favor other market regulators, such as the Commodity Futures Trading Commission )CFTC(.

Nevertheless, the current situation is unlikely to lead to the enactment of laws and regulations that would effectively ban encryption assets within the United States. Global legislators and regulators recognize the immense potential of encryption technology and are working to establish a reasonable legal framework for this asset class.

For other cryptocurrency trading platforms, the SEC's message is clear: the agency believes that most crypto assets are considered securities. These platforms must continue to assess whether each crypto asset is classified as a security based on its specific circumstances.

Overall, these lawsuits mark a watershed moment in cryptocurrency regulation. They could prompt Congress to take action and establish a clearer regulatory framework. Meanwhile, industry participants need to closely monitor developments and be prepared for various possible outcomes.