On wednesday the crypto market crashed by almost 10% in a sudden movement due to fears in the market one of which was the warning issued by the SEC(Securities and Exchange Commission) against the “potentially unlawful” exchanges.
Source:Coinmarketcap.com
In their post , they said If a trading platform lets people buy and sell cryptocurrencies that are considered securities basically, something you can invest in — then they must register with the SEC as an exchange.That registration means regulation that’s designed to protect consumers.
According to the SEC statement:
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”
The SEC has been trying to get a better control over many trading platforms and exchanges and has taken several enforcement actions against various cryptocurrency companies it labelled as fraud and also has issued subpoenas to many crypto related companies.
The other reason for the crash that happened was because of the potential hack of Binance fear that went around for a while which was later resolved by the ceo himself.
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