Coinbase has just released a series of internal documents from the U.S. Securities and Exchange Commission (SEC) related to discussions about Ethereum (ETH), XRP, and other digital assets. These documents were collected through the Freedom of Information Act (FOIA), revealing the agency's confusion and contradictions in handling crypto-related issues – especially in the context of the SEC still pursuing major lawsuits targeting exchanges like Ripple or KuCoin.
1. New York once asked the SEC to declare Ethereum a security – but failed.
In a June 2023 email, Ms. Shamiso Maswoswe – head of the Investor Protection Division at the Attorney General's Office #Newyork – suggested that the SEC submit an 'amicus' document to support the argument that Ethereum is a security, in order to strengthen the lawsuit against the KuCoin exchange. However, the SEC did not provide a clear response and did not participate in support as desired. This is evidence that even the SEC is not willing to assert whether Ethereum is a security or not.
2. The contradiction between action and stance: the SEC 'does not want to clarify' but still sues.
The emails and correspondence obtained by Coinbase have revealed a notable point: while #SEC continuously takes strong legal actions against crypto companies, the internal agency lacks consistency and hesitates to provide a clear definition of which assets are securities.
Specifically, in a letter dated December 9, 2021, sent to Ripple Labs – the company being sued by the SEC – the agency questioned whether Ripple's Liquidity Hub might be helping to sell XRP and other assets as securities. Ripple responded frankly on December 23, 2021, stating:
“We have no obligation to seek SEC approval to conduct our business operations.”
3. The SEC is being 'vague' while the crypto market needs clarity.
What Coinbase has disclosed shows a lack of transparency and clear direction from the leading U.S. regulatory agency in the digital asset space. While crypto companies are constantly being sued or closely monitored, internal documents show that the SEC sometimes appears confused, even avoiding answering critical questions.
Connecting to the crypto market:
This incident could make investors and exchanges even more concerned about the inconsistency and volatility of U.S. policies towards crypto. For users on Binance or other major exchanges, this is a clear reminder of the legal risks looming over the entire market. At the same time, it also emphasizes the importance of transparency and clear regulation in promoting sustainable development of digital assets.
Risk warning:
Investing in cryptocurrency can yield high returns but also carries significant legal and market risks. The inconsistency in the policies of regulatory agencies like the SEC can cause major price volatility and liquidity issues. Always stay informed and invest responsibly.
