The recent lawsuits filed by the Securities and Exchange Commission (SEC) against leading cryptocurrency exchanges Binance and Coinbase have ignited controversy within the crypto community. The SEC accused Binance, headed by Changpeng Zhao, of multiple regulatory violations, while Coinbase, a key player in the crypto industry, faced allegations of operating as an unlicensed broker and exchange. Amidst the backlash, attorney John Deaton, Managing Partner of the Deaton Law Firm, joined others in asserting that the SEC’s actions were driven by a hidden agenda to facilitate the involvement of Wall Street in the flourishing crypto sector.
Crypto enthusiasts have raised concerns about the SEC’s crackdown on crypto businesses, suggesting that its true motive might be to pave the way for United States-based financial institutions. John Deaton and Bitcoin advocate Preston Pysh aligned themselves with this view, arguing that the lawsuits against Binance and Coinbase were strategic moves aimed at leveling the playing field for Wall Street firms and enabling their entry into the fast-evolving world of cryptocurrencies.
Pysh emphasized the coincidental timing of major players such as BlackRock, Citadel Securities, and Fidelity Digital Assets applying for Bitcoin Exchange-Traded Funds (ETFs) and spot exchanges following the SEC’s legal actions against the crypto giants.
John Deaton echoed Pysh’s sentiment, suggesting a possible “inside job” between Wall Street and regulatory bodies. Noting the swift applications for Bitcoin ETFs from financial giants like BlackRock, Fidelity, Citadel, Schwab, and Deutsche Bank after the SEC’s lawsuits, Deaton implied a coordinated effort to synchronize the entry of Wall Street into the crypto space.
Caitlin Long, CEO of Custodia Bank, expressed skepticism regarding the coincidental timing of Wall Street’s involvement amid the SEC’s extensive crackdown.
In addition to the lawsuits, the SEC also classified over 15 cryptocurrencies, including ADA, SOL, MATIC, and BNB, as securities. Subsequently, several prominent US financial firms made significant moves to offer crypto-related services. EDX Markets (EDX) emerged as a new player providing crypto trading services. Furthermore, BlackRock, the world’s largest asset manager, applied for a license to launch a spot Bitcoin ETF, while WisdomTree submitted an application seeking SEC approval for a Bitcoin ETF.