JPMorgan said in a research report that the U.S. SEC's lawsuit against Binance and Coinbase highlights the need for U.S. lawmakers to come up with a comprehensive framework on how to regulate the cryptocurrency industry and the corresponding responsibilities of the SEC and CFTC.
JPMorgan said the moves "make it more urgent for U.S. lawmakers to come up with a comprehensive regulatory framework by this year." Until then, crypto activity is likely to continue to move outside the U.S. and to decentralized entities.
The report states that the SEC believes that most cryptocurrencies should be classified as securities, and therefore, most cryptocurrency companies and transactions should fall under its regulatory scope and comply with the regulatory framework currently applicable to other securities. If the SEC's position is confirmed by lawmakers, Coinbase, Binance.US and other US exchanges will have to register as brokers, and most cryptocurrencies will be considered securities.
The report says that while this may be more "burdensome and costly" for the industry, it will have some positive effects as crypto markets will be properly regulated and provide more transparency and investor protection. (CoinDesk)