An entire industry is caught in the SEC’s crosshairs

High noon in the US. What began a few years ago with scattered skirmishes between rebellious crypto CEOs, their blustering lawyers and incorrigible government bureaucrats has escalated to a political exchange of blows in recent weeks: the time for empty threats is over. Washington shoots live ammunition at the crypto industry, imposes millions in fines and bans, renders companies incapacitated or drives them into ruin. The industry is shaking and defending itself with lawsuits in public and on social media. More and more often also: in court.

It is a dispute that has been announced for a long time. Discharged, of all things, in the midst of one of the worst banking crises since the Lehman Brothers bankruptcy in 2008. The outcome – uncertain. But momentous. At stake is the future of the crypto industry. Almost every week, the industry is shaken by new bad news: President Biden calls for a 30 percent tax surcharge on the electricity used by miners. Its authorities – above all the US financial regulator SEC – overwhelm crypto companies with expensive lawsuits, the accusation is almost always: illegal securities trading.

One lawsuit after another

Ripple was already hit in 2020, then Uniswap and Binance in 2022, as well as a number of small companies. But these advances were often clearly limited. They targeted altcoins and exchanges. Staking, lending, DeFi, DAOs and even stablecoins: Almost every business model is now being targeted by the authorities as a potential form of security. And they no longer hesitate to shoot. Paxos is no longer allowed to offer its multi-billion dollar Binance stablecoin BUSD, the crypto exchange Kraken has to pay a $30 million fine and shut down its staking service, Kucoin its entire US platform.

At the same time, US authorities are cutting off industry access to the financial system – with catastrophic consequences. They warn banks and service providers not to do business with crypto companies, refusing interested contenders
important licenses and threaten particularly strict control requirements.