Digital Asset Exchanges Endangered

Commodity Futures Trading Commission (CFTC) is reportedly probing Binance Holdings Ltd. for permitting U.S. residents to access certain services.  That news has struck fear in those who might have wrongfully believed digital assets operate outside purview. 

The CFTC has previously taken action against BitMEX for violating multiple regulation.

As stated by the SEC, “Federal securities laws are based on a simple and straightforward concept: everyone should be treated fairly and have access to certain facts about investments.”

Binance and a handful of other exchanges have reportedly violated this principal.

Johnny Jaswal of CoinGeek.com warns of future actions taken against crypto exchanges if they fail to do the following:

Vet the tokens they list or delist; vet the programs they provide to users such as staking ETH to the Ethereum 2.0 network; and ensure compliance with AML regulations.

Jaswal writes:

The SEC has filed a lawsuit that changes that. In SEC v. Ripple Labs, the SEC filed a complaint alleging securities law violations against Ripple Labs, the issuer of the XRP digital token. The SEC alleges that Ripple’s continuous offering of this token from 2013 through the present constitutes a series of unregistered securities transactions. XRP has long been listed by various major digital asset exchanges, including Binance, Coinbase, Kraken, ShapeShift, Bitfinex and OKCoin. In the wake of the filing of this complaint, though some exchanges have announced their intention to suspend trading in XRP for U.S. customers, others continue listing XRP despite the SEC’s filed complaint.

These developments raise the question of whether those exchanges that have listed and facilitated trades in XRP—whether or not they have since delisted—have exposed themselves to liability under U.S. securities law.

He adds: For the digital asset space to flourish, compliant exchanges are required to protect investors, facilitate access to capital and support fair, orderly and efficient markets.

- Aaron Goldstein, Gambling911.com