The Security and Exchange Commission (SEC) has launched a major offensive to regulate the cryptocurrency industry.
In the language of the cryptocurrency industry players, the new offensive of U.S. regulators can be summed up in one word: crackdown.
The U.S. Securities and Exchange Commission seems determined to impose order with an iron fist on the sector, after years of a laissez-faire approach which has led to fiascos and resounding financial scandals, such as the overnight bankruptcy of the empire of the king of crypto Sam Bankman-Fried. His empire consisted of the FTC cryptocurrency exchange and its sister company Alameda Research, a trading platform.
Before FTX filed for bankruptcy last November, sister tokens Luna and UST collapsed in May 2022, triggering a credit crunch that put crypto lenders Celsius Network and Voyager Digital out of business. Billions of dollars have been wiped out in these scandals, leaving a bitter taste for millions of investors, including retail investors.
When these scandals broke, the question that came up the most was where the regulators were to protect clients or investors.