The SEC has highlighted the technological, legal, and regulatory risks associated with securing crypto assets. The Lawyer in the Ripple Vs SEC lawsuit predicted that now the commission will be filing cases against exchanges.
Ripple Lawyer Says SEC Will Come After Crypto Exchanges
In its advisory, the SEC emphasized the technological, legal, and regulatory risks associated with securing crypto assets. The release cites an October 2020 report detailing the number of digital assets stolen from cryptocurrency trading platforms in 2018.
The commission, however, claims that these risks are not new and that its staff has reviewed the financial statements of some organizations.
Meanwhile, Ripple lawyer Deaton anticipates one or more upcoming lawsuits against cryptocurrency exchanges by the end of the summer.
It is worth noting that the SEC has stated that they have refused numerous requests over the years to provide regulatory guidance on crypto assets. The release also mentions that “responsibility for the lack of legal and regulatory clarity lies at our doorstep.”
Fresh Guidelines Amid Recent Crypto Hacks
These guidelines, according to the Wall Street Journal, are a response to Commission Chairman Gary Gensler’s warning. He previously mentioned Coinbase and warned that users who buy cryptocurrency on the platform are ultimately making unsecured loans to the company.
The policy comes in the wake of recent hacks and crypto theft. Axie Infinity recently lost over $615 million in a hack, surpassing the $611 million theft of Poly Network in August 2021. According to the new rules, any digital assets owned by investors will be treated as assets by the platforms.
The changes will have a significant impact on corporate balance sheets. According to the Wall Street Journal, Coinbase’s balance sheet showed only $21.3 billion in assets and liabilities, despite the fact that it held $278 billion in digital assets by the end of 2021.
