• The US Securities and Exchange Commission (SEC) has sued two of the largest crypto exchanges in the USA, Binance and Coinbase.
• Cardano was listed among the assets accused by the SEC of being unregistered securities.
• In response, the Cardano Foundation has refuted all allegations made against its token ADA.
SEC Sues Binance and Coinbase for Unregistered Securities
The US Securities and Exchange Commission (SEC) has launched an offensive against two of the largest cryptocurrency exchanges in the country, filing a lawsuit against both Binance and Coinbase. The SEC’s complaint alleged that these exchanges were mishandling customer funds and engaging in wash trading. Ten crypto assets have been cited as unregistered securities, including Cardano (ADA), Solana (SOL), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS) and COTI (COTI).
Cardano Accused of Being an Unregistered Security
The SEC made many claims about Cardano in its official documents, such as stating that its three founding entities own the protocol. It also failed to mention Cardano’s commitment to decentralization or its upcoming Voltaire update which aims to transfer control to the community. Additionally, it emphasized that Cardano sold its tokens at an average price of $0.00024 each without acknowledging that this ICO took place only in Japan and so was not accessible to US investors. As a result of these accusations, ADA dropped 10% from $0.38 to $0.34 but regained some losses with support from within the crypto community including from the Cardano Foundation itself.
Cardano Foundation Refutes Allegations
In response to these claims, Fedrick Gregaard, CEO of the Cardano Foundation stated: “The Cardano Foundation disagrees with any suggestion that ADA is a security or that there have been any violations of security laws“. He went on to express his disagreement with all allegations made against ADA bythe SEC and reiterated his commitment towards keeping up their high standards when it comes to compliance regulations within their industry.
Implications for Crypto Industry as a Whole
This lawsuit has sent tremors throughout the entire cryptocurrency industry as it serves as another reminder for how seriously regulators are taking digital assets under their purview now more than ever before. As such it is important for exchanges like Binance to remain compliant with all regulations imposed by authorities if they want to continue functioning without interruption or legal repercussions moving forwards into 2021 .
Overall this lawsuit between cryptocurrency exchange giants Binance & Coinbase on one side versus government regulator SEC on another side serves as an important lesson for other exchanges operating within USA borders regarding strict regulation compliance at all times . Keeping this lesson in mind will be essential for any exchange wantingto operate within USA jurisdiction moving forward into 2021 & beyond .