On June 6, the SEC announced it was charging Coinbase for operating as an unregistered securities exchange, broker, and clearing agency. That prompted media speculation that this could be the death knell for crypto in the US, which seems an extreme conclusion. But the SEC announcement didn’t pull any punches:

The SEC said: “Since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities. The SEC alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law. Through these unregistered services, Coinbase allegedly:

• provides a marketplace and brings together the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interact;
• engages in the business of effecting securities transactions for the accounts of Coinbase customers; and
• provides facilities for comparison of data respecting the terms of settlement of crypto asset securities transactions, serves as an intermediary in settling transactions in crypto asset securities by Coinbase customers, and acts as a securities depository.”

SEC Chair Gary Gensler said: “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions.”

Last weekend Paul Grewal, Chief Legal Officer for Coinbase tweeted: “We couldn’t wait until our deadline next week to address the SEC’s response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court.”

Binance troubles

Meanwhile, as its troubles in the US continued after the SEC filed a temporary restraining order, Binance’s UK operation Binance Markets Limited (BML) deregistered in the UK. Ilir Laro, Binance’s sub-regional manager for growth in the UK and Europe, emphasized that Binance’s regulated entities are still very much active in Europe, operating in France, Italy, Spain, Poland, and Sweden.

In the UK, having announced rules for a cooling-off period and banning refer a friend schemes on crypto platforms, the FCA published a Policy Statement on financial promotion rules for cryptoassets, which includes the near-final FCA Handbook rules covering this. 

Meanwhile, the All-Party Parliamentary Group (APPG) on Crypto and Digital Assets published a report entitled Realizing the Government’s Vision for the UK to Become a Global Hub for Cryptocurrency & Fintech Innovation.

The report is the latest step in the UK’s bid to become a centre for cryptocurrency adoption. “We want this country to be a global hub – the very best place in the world to start and scale crypto-companies … If crypto-technologies are going to be a big part of the future, then we – the UK – want to be in, and in on the ground floor,” said John Glen, Economic Secretary to the Treasury.

Bitstamp registers in UK

The FCA also approved Bitstamp and Interactive Brokers’ application to join the financial regulator’s registry of crypto asset service providers. This is the first addition to the UK crypto register in roughly six months.

Bitstamp said: “[We are] a compliant and secure gateway to crypto in the UK. We operate according to the UK’s Anti-Money Laundering Regulations, demonstrating our commitment to regulatory compliance”.