Under SEC fire, crypto firms choose to die hard

When Coinbase CEO Brian Armstrong tweeted On Tuesday evening, as the SEC threatened to sue if the company launched its high-yield loan product, Ripple CEO Brad Garlinghouse was quick to respond. Just 90 minutes after Armstrong’s tweet, Garlinghouse tweeted a “Die Hard” meme with Bruce Willis saying, “Welcome to the party, mate.”

The implicit message: Ripple has been fighting the SEC for over a year, and now Coinbase is part of the fight, like it or not. Mark Cuban also had a message for Armstrong: “You have to go on the offensive.” Cuban refused to develop for Decrypt on what that might sound like (“It’s up to them to decide”), but you can tell Armstrong is already playing on the offensive with the tone of his tweets. He accused the agency of “behind closed doors intimidation tactics” and concluded sarcastically: “It’s good if you actually apply [guidance] equally across the industry. “

What happens next will not be determined by the tweets. Leading companies in the crypto industry are under attack and they have started to fight back, demanding a fair and consistent set of rules that clearly state what is legal and what is not.

They’re right. Ripple’s ugly battle with the SEC is over whether its sale of XRP tokens was an unregistered securities offering. Why has the SEC waited so long – Ripple has been selling XRP for eight years – before proceeding further, and why does the agency appear to be applying one legal test to Ripple and another to Ethereum? As for Coinbase, it says it has done everything possible to consult with the SEC on how to make its offered loan product as safe and secure as possible for investors. According to Armstrong, the agency would not speak to them.

Then there’s the decentralized Uniswap exchange, one of the most transparent companies in the fast and furious DeFi industry. But the SEC chose him as the target of investigation, neglecting, as a crypto lawyer Jake Chervinsky noted, other “blatant frauds”, carpet pulls and pumps and dumps in DeFi.

It’s no wonder Armstrong, Garlinghouse and others have had enough and concluded that it might be better to roll the dice in the courts rather than keep trying to adhere to the crypto policy. opaque current of the SEC and its strict applications.

This is all a surprising turning point considering that just a few months ago, when new SEC chairman Gary Gensler took the helm, the industry was hailing him as pro-crypto because he taught a blockchain course at MIT been the advocate the crypto folks have assumed (don’t hold your breath on this US Bitcoin ETF endorsement) he looks downright hostile. Now the question of what the Gensler regime will do next hangs over all cryptoland companies, traders, miners and investors.

One can only guess. Gensler may be facing pressure from members of the White House and the Treasury Department who view crypto as a threat to the US dollar. Or maybe he really thinks the SEC is protecting investors. Many of those same investors are probably cursing him for blocking out new ways to earn more than 5% interest on savings accounts rather than the 0.5% or less that banks pay.