A recent announcement by the US Securities and Exchange Commission (SEC) suggests that the crypto industry may be in for more pain as it continues to endure the far-reaching consequences that the Commission’s enforcement actions have had on it. More Pain Incoming For Crypto? During the Securities Enforcement Forum Central 2023, David Hirsch stated that his office plans to bring action against other crypto companies that were breaking the law. Hirsch heads the agency’s unit (Crypto Assets and Cyber Unit) that handles crypto enforcement, including the lawsuits against the biggest crypto exchanges in the world, Binance and Coinbase, and another against Ripple. Related Reading: Grayscale Takes New Approach As It Files For Another Ethereum Futures ETF These actions are already negatively impacting these companies and, by extension, the crypto industry. As such, any further action could dampen the mood in the crypto market further. For instance, Binance US, the American arm of Binance, has seen a significant drop in its trading volumes since it began to face regulatory scrutiny. In June, the SEC sued Binance US for a range of infractions, including misrepresentation of trading controls and oversight on the platform. This forced the company to suspend trading for more than 100 token pairs, causing a significant drop in trading activity and investor confidence. Also, despite securing a major victory against the SEC, Ripple’s XRP has lost most of its gains that resulted from the judgment. The XRP price has remained tepid overall, and one of the reasons for this could be that the Commission’s regulatory stance on Ripple has cast doubts in the minds of potential investors, especially with the SEC contesting Judge Analisa Torres’ ruling. The SEC’s continued clampdown on companies in the industry evidently influences how outsiders interact with stakeholders in the industry as they may be looking to avoid the SEC’s wrath. Ripple’s CTO, David Schwartz, also recently revealed how the SEC’s lawsuit made the company lose a deal with a stablecoin issuer. Meanwhile, others in the industry may be forced to leave the market or shut down certain parts of their operations, as in the case of crypto exchange Bittrex, which had to shut down its US operations earlier this year. DeFi Not Exempted From SEC’s Wrath So far, the SEC has been known to have largely gone after crypto projects that are more centralized. However, Hirsch stated that Decentralized Finance (DeFi) projects, which could be a direct reference to decentralized exchanges (DEXs), would not be exempted from his unit’s enforcement actions as the “label of DeFi” will not deter them from conducting investigations and doing their job. Related Reading: Bearish Signal? Bitcoin Whale Wakes Up From 6-Year Slumber And Transfers $56 Million He, however, admitted that the Commission might not have enough resources to go after all these projects as they are already burdened with several lawsuits. This is in line with pro-XRP legal expert Fred Rispoli’s reasoning that the Commission may be looking to avoid any further legal battle as they do not have enough manpower to handle any additional lawsuit. Total market cap trailing at $1.039 trillion | Source: Crypto Total Market Cap on Tradingview.com Featured image from The Street, chart from Tradingview.com
