57
The U.S. Securities and Exchange Commission or SEC knocks on the COINBASE door for the regulation probe. Coinbase was shocked and was trying to figure out why they got probed. Does the SEC just shock Coinbase? Let’s try to find out.
BlockFi incidence
BlockFi is another crypto-finance company that offers similar products that Coinbase did - BlockFi Interest Account (BIA). On July 22nd, 2021, Alabama took a view that BIA is rather a product than an account.
Crypto as a security
There is no final resolution on what crypto belongs to.
The Duck Test
The SEC has a simple rule that if something looks like a duck, waddles around, and quacks, it is a duck even if that thing is called a panda, lion, or even a human being.
Crypto is a duck then and regulations are coming
Securities regulations
Securities Exchange Act of 1934 and Securities Act of 1933, Section 5
It requires any security to register under the SEC.
Exemption: Section 4(a)(2) of the Securities Act exempts
If securities do not form part of any public offering from the registration requirements, they may not need to comply with the ordinary regulations.
Coinbase “Oops” is not working
BlockFi has experienced that Coinbase may not be able to escape.
What the SEC wants from Coinbase
The SEC wants KYC data that register with Coinbase of all customers.
Crypto lending becomes tricky in the US
The regulation becomes more strict on lending and likely more ambiguous on which crypto products may be regulated in the future.
In conclusion
The regulations wave keeps coming. You may need a diversified portfolio this time to prevent possible tax evasion or possible account locked down.
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-------------------------------------------------------------------------------------Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational
