The Biggest Threat on Cryptocurrencies: The Authorities
Industry executives worry about being forced out of one of the biggest markets as a result of the US government’s aggressive pressure on the cryptocurrencies sector at the beginning of the year.
US regulators, particularly the Securities and Exchange Commission (SEC), have brought multiple legal actions against some of the top crypto market participants or the companies that issued their assets since the year’s beginning. In addition, banks that offered cryptocurrencies platforms accounts and payment processing services came under fire, according to RBC Crypto.
The Aim of The Regulators Change, but the Regulations Stay the Same
The Gemini exchange and the Genesis trading firm were this year’s initial targets of regulatory pressure. They were charged with failing to register the Gemini Earn user income accrual program and the wider crypto-asset loan scheme as securities law-related operations.
A similar lawsuit and a $30 million punishment were levied against the Kraken exchange, one of the top participants in the Ethereum cryptocurrencies staking market, a month later. She was compelled to cut back on the US users’ staking program. The exchange “promised” more than 20% each year in profits from the service, according to officials.
SEC’s Decisions Make a Big Impact on Cryptocurrencies
The SEC‘s decision to prohibit the issuance of the stablecoin BUSD has arguably garnered the greatest attention, and Paxos‘ elimination from the list of issuers of the top three stablecoins surely causes changes in the market. Zhao pointed out that around $2.45 billion of the BUSD capitalization was transferred to other stablecoins, namely USDT from the issuer Tether, which is less influenced by US legislative decisions. The head of Binance has noted that “the environment of stablecoins is shifting drastically.”
By switching to the less well-known stablecoin TUSD (TrueUSD), which at the time had a capitalization of roughly $969 million, the exchange is already presenting alternatives to BUSD. Zhao responded to inquiries during the same show, although he pointed out that given the increasing pressure from US regulators, dollar-pegged stablecoins would eventually lose market share to “stablecoins” backed by the euro or other fiat currencies.
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