The Current State Of The Crypto Industry

Is the crypto industry in the United States dead? In the absence of formal legislation regulating the crypto industry in the United States, the Securities and Exchange Commission (SEC) has taken matters into its own hands and is singlehandedly going after crypto firms for violating federal securities laws by failing to register their activities with the SEC. The SEC's aggressive stance against the industry has ratcheted up following criticism for its failure to act quickly enough to stop the death spiral of FTX last year. The latest crypto firms caught in the crosshairs include two of the largest, Binance and Coinbase, which are the subjects of recent SEC enforcement actions.

In recent years, the SEC, under the leadership of Chairman Gary Gensler, has repeatedly taken the position that crypto assets¹ constitute "securities" subject to regulatory oversight by the Commission under the test set forth in the U.S. Supreme Court case, SEC v. W.J. Howey Co.,328 U.S. 293