Much like the now-defunct FTX, they combined exchange, brokerage and clearing services — traditionally separated to avoid conflicts of interest — while failing to meet basic standards for disclosure or investor protection.
The Securities and Exchange Commission (SEC) has fired a major new salvo in chair Gary Gensler’s war on crypto, declaring illegal two of the world’s largest digital-token trading platforms, Binance and Coinbase. It is a welcome development: In myriad ways, the two enterprises exemplify what financial intermediaries should not do. What is needed now is an actual rulebook.
The SEC complaints, filed in federal court, read like a catalogue of what’s wrong with the intermediaries through which most US investors interact with crypto. Both Binance and Coinbase sold products that had the features of securities, without registering as such.
