SEC...coming to eat Crypto?

• Does this picture metaphorically reflect the current struggle between crypto and the SEC...?
• Indeed the SEC seems like a huge beast and crypto projects are so small in comparison, this picture could reflect how some projects feels, once the SEC sets their sights on them, and prepares to make them a meal.
• But perhaps there is hope.
• XRP/Ripple has the money to fight the SEC, and fight they have, for over a year.
• Some would say they are on the cusp of winning, but the jury is still out on that case.
• However, a number of recent moves by the SEC recently are unsettling:

1. The lawsuit and settlement against LBRY the blockchain based social media community.

1. The lawsuit and settlement against KRAKEN the eight plus year old cryptocurrency exchange, which cost Kraken several million dollars and the SEC demanded they stop offering staking services to their US customers.
2. The SEC suit against PAXOS for selling what the SEC calls an unregistered security BUSD! Which is a stablecoin, a surprising development, as stablecoins are the least likely cryptocurrency token to violate the famous Howie Test, which defines securities. However SEC action may have provoked the New York State authorities to issue a ban to PAXOS on minting BUSD.
3. The ongoing investigations of Binance, the largest crypto exchange in the world, along with investigation of companies associated with Binance, like Paxos.
4. These moves threaten companies trying to do business in the US, in VISA has announced it will do no more partnerships with cryptocurrency projects until there is clearer regulation.
5. The Wyoming based Cryptocurrency Bank Custodia Bank filed an application for Federal Reserve Status 2 years ago, and it recently was denied. This bank has stood out as a sign of increasing mainstream adoption of cryptocurrency, and it's rejection is a huge blow to efforts to create regulated, safe banking partner for cryptocurrency projects in America. The SEC didn't do this, the Federal Reserve stated it felt providing banking services to cryptocurrency companies was inconsistent with safe and prudent banking services. But some would say, the lack of regulatory oversight and clarity, is what makes cryptocurrency investments unsafe and imprudent.
6. Visa announces a suspension of all efforts to partner with cryptocurrency projects. The SEC didn’t do this, but lawsuits investigations and fines by the SEC discourage American businesses to partner with cryptocurrency projects.
7. In the wake of the FTX debacle, Americans outside crypto are trying to understand why American investors are dealing with offshore exchanges which are unregualted by American laws. Some would say that those who do so, do so at their own peril. Others say it's because the SEC hasn't provided enough regulation reflecting the reality of the cryptocurrency market, not the reality the SEC wishes the cryptocurrency market was...
8. In defense of the SEC, there are cryptocurrency exchanges and projects in the US which register their cryptocurrencies as securities and trade them only on exchanges with accredited investors. They follow the existing SEC rules. The problem is that those limitations exclude the majority of Americans who now invest in the stock marlet through brokerages like Charles Schwab, E-Trade, Robin Hood, and other online brokers, which service over 75 million Americans.
9. In the view of some in the cryptocurrency community, this disparity presents a clear picture between what the SEC currently sees as the box cryptocurrency should fit into, and the box cryptocurrency currently lives in. Some would say that the SEC vision is unobtainable, as the majority of cryptocurrency investors are not accredited investors and they can't move into the box that the SEC wants them in.
10. But I have hope that when the Leaders who establish rules for financial markets, and those who appoint the SEC leaders, will in time work with the SEC and other government bodies to create a third box where cryptocurrency investors and cryptocurrency projects can live, which will accommodate existing projects and existing investors.
11. This third box will hopefully have new rules defining accredited investors for this new class of financial instruments.
12. This third box Will hopefully have clarified rules for categorizing existing cryptocurrency projects into the existing financial categories based on their components and characteristics so they can be regulated by the existing regulatory structure.
13. I don’t think the government needs to reinvent the rules with regard to stocks, bonds, commodities and money transmitters. I think the government just needs to clarify the categories that the different types of cryptocurrencies fit into, and then the projects can adhere to the applicable existing rules and work with the government to create any fair and necessary modifications.
14. I think this could lead to a golden age of cryptocurrency with increased commercial activity, increased tax revenues and a new technological space , similar to the internet, with new jobs, new businesses and a great financial return to the countries providing favorable rules for cryptocurrency.
15. The potential of blockchain technology to improve lives is great, but I feel we are scratching the surface of it’s potential uses. And just like the internet 20 years ago, we have no idea what new and amazing use cases will develop on the blockchain in the future.

@shortsegments