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With the U.S. compliance agency becoming the driving force of this bull market, the U.S. government has become the biggest variable in the global cryptocurrency field. After successive punishments on EOS, Libra, Telegram, BitMEX, and XRP, who will be the next “unlucky one”? New rumors emerge every day.
Among them, USDT is the number one target that has always been well known. It has battled with U.S. regulation for many years, but stablecoins are not applicable to the most fierce SEC securities jurisdiction; the SEC initiated tracking of BNB in July last year, and there is no follow-up progress disclosure for the time being. And Binance embraces a positive attitude towards supervision; LINK was the first to spread rumors after the XRP incident, but some voices believed that it was malicious speculation by short sellers; TRON was previously investigated by the US media, and public opinion on January 5 was also agitated. In short, these four projects have received the most attention in the “iron fist” speculation of public opinion.
The impact of US regulators on the XRP crackdown is beyond imagination. In December 2020, the US Securities and Exchange Commission filed a lawsuit against Ripple and its two executives, accusing them of raising more than $1.3 billion through unapproved registration of securities and manipulating market prices to sell high and buy low. Subsequently, more than 60 mainstream exchanges such as Coinbase delisted XRP, and the price of the currency has fallen by more than 60% in the past 30 days. The latest news shows that Grayscale has sold all XRP held and removed from its investment portfolio.
In October 2020, the U.S. Commodity Futures Commission CFTC filed a complaint against BitMEX, the world’s largest derivatives exchange, and then BitMex executives were directly arrested in the United States. At present, the trading volume of BitMEX contracts has been surpassed by the four major Chinese contract exchanges. Further on, the US regulators’ attacks on Libra and Telegram led to the suspension of their currency issuance plans. EOS ended up pretty well. The SEC investigation ended with a fine of 24 million U.S. dollars, which is “a drop in the bucket” compared to the Bitcoin that it raised billions of dollars in.
As mentioned earlier, because this bull market is largely due to the purchase of U.S. compliance agencies, these agencies are very sensitive to U.S. government supervision. Therefore, after the SEC punishes Ripple, decentralized and centralized cryptocurrencies have become clear. The rise and fall contrast of Bitcoin/ETH and other leading decentralized cryptocurrencies also led the rise.
The next project that may be punished by US regulators, especially the SEC, has a lot of discussions from all walks of life. All kinds of rumors have continued for a while. A big V proposed the hypothesis in the screenshot below, and Justin Sun’s wave field on January 5 also triggered There was a lot of controversy. Adam Cochran, a partner of Cinneamhain Ventures, believed that TRON had been investigated by the US SEC, but Justin Sun argued that he had not received any regulatory notices from China or the US.
The core criterion of the SEC’s judgment is whether the project is a security. The test standard is the classic Howey test, including the investor’s need to invest funds or other resources; the investor’s funds, services or goods are concentrated and unified into the common project under the control of the investment promoter; the investor expects the investment project to bring profit returns, At the same time, investors also need to bear the risk of capital loss; investor returns are only earned by the investment promoter or a third party unrelated to the investor; generally speaking, investors do not participate in the actual operation of the project, and the success of the project Investor has nothing to do. The most important thing is that investors expect profitable returns from investment projects. Refer to “The Legal Supervision Path of U.S. Non-Sovereign Digital Currency”
But based on this standard, the SEC can almost crack down on the vast majority of cryptocurrency projects, so what is the core standard that it (and other regulatory agencies) choose to crack down on? From past experience, there are the following four points:
1. The higher the degree of centralization, the easier it is to be attacked; such as XRP.
2. The greater the influence and popularity of the project, the easier it is to be attacked; for example, Libra.
3. The higher the amount of funds raised, the easier it is to be hit; for example, the historically number one EOS and TELEGRAM.
4. The more resistant to regulatory attitudes, the easier it is to be attacked; for example, BitMEX.
At present, the four core currencies among the many doubts are: USDT, TRX, BNB, and LINK.
In terms of centralization, USDT is the highest, followed by BNB, TRX, and LINK; in terms of project influence, USDT is the highest, followed by BNB, TRX, and LINK; in terms of fund-raising amount, BNB raised 15 million US dollars in 2017; LINK is in In 2017, 32 million U.S. dollars were raised; TRON raised about 4,000 bitcoins. Because the time is relatively early and the amount of funds raised is not high, it can be ignored to a certain extent.
Among them, USDT has struggled with the U.S. government for many years, while USDC and BUSD have become one of the cryptocurrencies with the fastest increase in market value in 2020 because of their compliance with stable currency routes. Boiling 2020: The top 30 cryptocurrency trend analysis is the sudden emergence and the lagging behind.
USDT is special. According to Howe’s test, stablecoins are difficult to classify as securities. They belong to the Financial Crime Enforcement Network (FinCEN) under the US Department of the Treasury, rather than the strictest SEC supervision, which helps USDT reduce risks to a certain extent. However, due to the wide range of uses of stablecoins, there are many regulatory agencies concerned. In April 2019, the New York Attorney General’s Office accused BitFinex and Tether of misappropriating USDT reserves to make up for a $850 million shortfall, and subsequently sued Bitfinex and Tether.
On October 29, BNB was exposed to an article by Forbes, a well-known American media, that it intended to avoid supervision through a well-designed corporate structure, and even hinted that the FBI was involved in an investigation. Binance angrily clarified and subsequently announced a lawsuit against Forbes reporters.
Although the aforementioned Forbes hinted that the FBI investigation is likely to be groundless, many people did not pay attention to the fact that last July, the SEC authorized CipherTrace, which had cooperated with Binance in the security field, to track Binance Chain and BNB. The initial period of authorization is One year, the follow-up period can be extended up to 4 years. This shows that BNB has been in the sight of “Iron Fist” early on. Depending on Binance’s response, a good response may be like EOS ending up with a small fine. Will Binance, which has a profit of 1 billion U.S. dollars, attract US government supervision? The problem comes from derivatives and securities tokens
LINK and TRON are largely due to the presence of severe attackers, and public opinion exaggerates the regulatory attention to it. The well-known short seller Zeus Capital has spared no effort to attack LINK, and immediately said that LINK will be investigated by the SEC; TRON was exposed by a long article by the well-known American technology media the Verge due to its aggressive style, and was exposed on January 5 Adam Cochran accused. But the influence of the two is relatively small.
In addition, because of its greater influence and more fundraising; XLM because it is similar to XRP; ADA because of its obvious centralization, etc., there is also a certain probability of being regulated.
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