• The SEC has announced that it will be suing Paxos, the issuer of stable coin BUSD, for selling an unregistered security.
• Many analysts now fear that this could signal the start of an all-out crypto war from the SEC.
• Bitcoin prices have dropped due to the news, and further macroeconomic developments may cause a steeper correction in BTC prices.
SEC’s Unpopular Move
The Securities and Exchange Commission (SEC) recently announced its intention to sue Paxos, the issuer of stable coin BUSD for selling an unregistered security. This move has been met with criticism from analysts who fear it could signal an all-out crypto war from the SEC.
Compounding fears is recent settlement between U.S. crypto exchange Kraken and the SEC where Kraken was ordered to pay a $30 million penalty fee and shut down its staking services as part of the agreement. Marcus Sotiriou – market analyst at digital asset broker Global Block – expressed his concern by saying: „The SEC war on crypto is only just getting started.“
The announcement sent shockwaves through cryptocurrency markets causing Bitcoin prices to drop below $22K after previously holding steady at around that level. Joe DiPasquale – CEO of Bit Bull Capital – commented on this situation by saying: „While bitcoin has shown general resilience in this rally that started on January 1, we are now looking at a key level which should indicate whether or not we see a steeper correction.“ He added that if BTC fails to reclaim $23,000 then it could „fall toward $20,000 rather quickly“.
The fate of cryptocurrencies is also largely affected by macroeconomic developments such as December consumer prices being higher than expected which could lead to a bigger rate hike in the next Fed meeting according to DiPasquale.
It is clear that the SEC’s decision to sue Paxos for selling an unregistered security has had significant negative impacts on cryptocurrency markets leading some analysts to fear an all-out crypto war from regulators may be coming soon.