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- The fast-paced crackdown of the crypto industry by the SEC has an hidden agenda.
- This hypothesis was put forth by crypto lawyer, John Deaton who believes the big banks will be favored.
The recently intensified effort of the United States Securities and Exchange Commission (SEC) to crack down on crypto-related entities comes off as a strategy for the regulator to suffocate the nascent industry and give more authority to the big banks. Pro-XRP lawyer John Deaton who is representing XRP holders in Ripple’s lawsuit with the SEC believes that these big banks would swing into action, clearing vast pieces of the crypto market after the U.S. regulator has finally crumbled it.
By big banks, Deaton is referring to banking heavyweights like JPMorgan and Goldman Sachs. Eventually, when they have had their fill of the crypto ecosystem, the SEC and other U.S. watchdogs would then swing into action to design a robust crypto regulatory framework.
His message which was embellished with some form of sarcasm stated “Crypto isn’t dead. I will say this again: this is all about crushing the market and then, watch, JPMorgan and Goldman Sachs, etc. will get a bigger slice and then give Gensler a call, and then there will be some ‘framework’ worked out.”
SEC is Intentionally Cracking down on Crypto Firms
The over two-year-long SEC vs Ripple case is still ongoing, although a verdict is expected in the coming weeks. Now, the broad crypto industry is faced with another threat as the SEC files multiple charges against two top crypto exchanges Coinbase and Binance.
Global leading crypto exchange Binance was charged by the regulator for breaking securities rules, misleading investors and regulators, mishandling customer funds, flouting basic Know-Your-Customers (KYC) rules and allowing Americans to improperly open accounts and trade on its platform.
According to Chairman of the SEC, Gary Gensler, the exchange operated an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law. A day later, Coinbase was also indicted for operating as an unregistered broker and exchange operator, violating regulatory requirements.
In both lawsuits, a total of about 16 tokens were listed as unregistered securities including Solana BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS,) and Coti (COTI).
Deaton perceives that all these charges are just part of an ongoing anti-crypto agenda to give bigger financial institutions the leverage to acquire a significant percentage of the industry. Even before Coinbase was sued last week, the pro-XRP lawyer had predicted that the SEC would find an offence against the exchange. In addition, he related the recent opinion of John Reed Stark, a former SEC official, that a Department of Justice lawsuit may be coming for Binance, as part of this agenda.
Also, he believes that a takeover attempt may be made on Coinbase especially if the Chief Executive Officer (CEO) Brian Armstrong doesn’t accept an incumbent partner.
