Recently, the virtual currency market has been in a state of flux, and many investors have felt frightened. Our Changpeng boss appeared on CCTV again, and even in a parallel universe he held up an AK to defend the justice of our currency circle.

For us, the blockchain revolution that has just emerged has reached the moment of a pyramid scheme scam again...

Why? Mainly, the U.S. Securities and Exchange Commission (SEC) launched a lawsuit against two well-known cryptocurrency exchanges, Binance and Coinbase, accusing them of violating securities regulations, thus bringing great uncertainty and pressure to the encryption industry.

SEC hammer falls

The SEC is very cunning. It is clearly the "Shamelss Evil Captain Amercia" (shameless evil Captain America), but it insists on picking up a hammer and hitting it randomly.

According to the SEC’s official news, the SEC accused Coinbase of illegally offering and trading crypto-asset securities on its platform since 2019, including its staking services, without registering with the SEC. The SEC also accused Coinbase of mixing the functions of an exchange, brokerage and clearing house without registering any of these functions with the SEC as required by law. In addition, the SEC also charged a former Coinbase product manager and two of his associates with using inside information to conduct multiple trades before making certain crypto assets available for trading on the Coinbase platform, thereby illegally profiting more than $1.1 million.

As for Binance, the SEC accused it of providing and trading crypto-asset securities, including its leveraged tokens, options, futures and other derivatives, in the United States since 2018 without registering with the SEC. The SEC also accused Binance of using its distributed network and multiple domain names to evade regulation and deliberately misled U.S. investors into thinking that Binance was a legitimate and safe platform.

These two lawsuits are undoubtedly a major blow to the cryptocurrency industry and have also caused panic and volatility in the market. According to statistics, since the SEC initiated the lawsuit, the prices of mainstream cryptocurrencies such as Bitcoin and Ethereum have plummeted, and their market value has shrunk by hundreds of billions of dollars. Many investors have also withdrawn funds, resulting in a significant reduction in trading volume.

What is the future of the virtual currency market?

Faced with such a severe situation, how hopeful is the prospect of the virtual currency market? Is this going to decline and die? I think the answer is no. Although it seems that the SEC's attitude towards the cryptocurrency industry is very tough and hostile at present, this does not mean that there is no possibility of change in the future. After all, cryptocurrency, as an innovative and revolutionary technology and financial tool, has attracted hundreds of millions of users and supporters around the world, and has also spawned countless applications and values. If the SEC completely ignores these facts and just blindly suppresses and bans, it will not only damage the competitiveness and influence of the United States in the digital economy, but also cause social backlash and dissatisfaction.

In fact, Coinbase has taken legal action against the SEC, requiring it to publicly respond to Coinbase’s July 2022 petition to create formal rules on digital asset regulation. Coinbase believes that the SEC should conduct reasonable and transparent supervision of the crypto industry based on the existing legal framework, rather than using vague and arbitrary standards to determine which crypto assets are securities and which are not. Coinbase also called on the SEC to engage in dialogue and communication with the crypto industry to reach consensus and cooperation.

I believe that Coinbase’s approach is worthy of appreciation and support, and is also one of the necessary conditions for the prosperity and development of the virtual currency market. Only when the encryption industry and regulatory agencies can establish a relationship of mutual trust and cooperation can we provide investors and users with a safe, fair, transparent and orderly market environment, and can we promote the innovation and application of encryption technology. Of course, this is not an easy thing and requires both parties to make certain compromises and concessions, as well as time and patience.

On the other hand, I believe that the virtual currency market also needs to adjust and optimize itself from within to improve its ability to withstand risks and crises. For example, cryptocurrency exchanges should pay more attention to compliance and security, avoid businesses and activities that may violate the law, and disclose relevant information and risks in a timely manner. For example, cryptocurrency investors should be more rational and cautious, not blindly chase hype and bubbles, but also do a good job in risk management and diversified investments. For example, cryptocurrency developers should pay more attention to technological innovation and improvement and solve some existing problems and challenges, such as scalability, privacy, interoperability, etc.

In short, although the virtual currency market is currently in a difficult and turbulent stage, it does not mean that there is no future. As long as we can reach consensus and cooperate with regulatory agencies, and can improve and improve ourselves from within, then the virtual currency market may be able to break out of its cocoon and usher in a new spring.

The blockchain revolution has not yet succeeded, and comrades still need to work hard.

(This article only represents the author’s personal views and does not constitute investment advice. The numbers, data, facts, etc. involved in the article are all from online search results and are for reference only.)