JPMorgan says crypto exchanges may be forced to register with SEC

Ever since the two lawsuits were filed against two of the most popular United States-based crypto exchanges, Coinbase and Binance.US, by the Securities and Exchange Commission, indications have been raised regarding the potential probability of both crypto exchanges registering with the SEC.

JPMorgan strategists led by Nikolaos Panigirtzoglou have reported that by time, lawmakers, Coinbase, and Binance.US might agree with the SEC, following other U.S. exchanges that would have to register as brokers and be treated like securities. Furthermore, it is said that “this could be more onerous and costly for the crypto industry, but there could be positives as well, as crypto markets would be subjected to similar regulations applied to traditional markets such as equities and thus offer more transparency and investor protection.”

After the SEC sued both crypto exchanges, the regulator hopes that the firms will have to follow the rules for stock exchanges or stop trading crypto assets in the country.

According to JPMorgan strategists, efforts from the SEC for U.S. lawmakers to develop a clear regulatory framework this year have shown a positive increase. Without this kind of clarity, crypto activity in the U.S. is expected to shift outside of the country and into decentralized groups, and venture capital funding for crypto will stay low. It has been reported that such regulation reflects optimistic outcomes by avoiding bad practices and leaving room for more “maturity” and institutional participation.

JPMorgan states that based on the lawsuit against Binance and Coinbase, the SEC claimed that over a dozen crypto tokens, like Solana’s SOL and Polygon’s MATIC, are considered securities. Considering the situation, if the SEC were to win the case, exchanges would be delisting the above-mentioned tokens and limiting their selective blockchains’ potential development. Consequently, Ethereum benefits.

As strategists have claimed, the SEC’s actions from last week make it more likely for Ethereum to become even more dominant in the smart contract blockchain space. That comes as a result of the fact that most of the tokens that the SEC is going after are competitors to Ethereum.

However, the assumption that Binance could potentially collapse is far from a given, considering that Binance continues to remain at the center of the BNB blockchain.


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