Justin Sun and crypto Twitter react to SEC’s recent crusade
Justin Sun lashed back at the SEC, claiming the regulator’s charges are unfounded. Sun believes the SEC’s regulatory framework for crypto is in its infancy and needs improvement.
Sun also said he would be prepared to engage with regulatory authorities throughout the globe to develop open standards for dealing with and regulating the cryptocurrency business.
The SEC’s allegation, filed in the US District Court for the Southern District of New York, claims that Sun and his businesses sold TRX and BTT as investment opportunities through multiple unlicensed “bounty programs.” The latest allegedly required participants to advertise the tokens on social media, enlist and recruit others around Tron-affiliated Telegram and Discord channels, and establish BitTorrent accounts in return for token distributions.
The lawsuit claims that Justin Sun, BitTorrent Foundation, and Rainberry sold BTT in unlicensed monthly airdrops, including US investors, who held TRX in Tron wallets or on connected crypto asset trading platforms.
Crypto community reacts to SEC’s moves
The allegations brought by the SEC against Justin Sun and his firms are just the latest example of the agency’s assault on the cryptocurrency market.
The crypto community quickly reacted when Coinbase announced it had received a Wells Notice, a formal notification of an impending enforcement action.
In response, Coinbase CEO Brian Armstrong, whose firm is additionally fighting the SEC on matters staking, started a discussion on Twitter. He described the event as “a step along the way” to reforming the US banking system.
Moreover, Armstrong is confident that the trade complies. Therefore, he welcomed the opportunity to prove it in court.
The legal procedure, he says, will show the SEC’s unfairness and unreasonableness and show that the agency has not demonstrated a seriousness of purpose when it comes to its engagement on digital assets.
Caitlin Long, the founder of Custodia Bank, stated that a Wells Notification was delivered to “every exchange” in early February.
She said that US officials are “definitely” going after crypto firms, citing coordinated enforcement actions against Paxos and Kraken.
Lightspark co-founder David Marcus stated that Coinbase decided to cooperate with authorities and operate lawfully. He criticized how it had been handled by the establishment and asked why the SEC was so lenient with unscrupulous businesses.
Polygon’s co-founder Sandeep Nailwal agreed with Marcus, stating he doesn’t understand the issue since Coinbase “is the gold standard of compliance.”
Blockchain Association Chief Policy Officer Jake Chervinsky has voiced his displeasure with the agency’s decision. He mentioned the SEC was often blamed for governing by enforcement.
Coinbase has a “war chest and facts on their side,” as Wolf of all Streets Podcast host Scott Melker put it. He predicted the SEC would be defeated in court.
Angel Investor Jason called the issue a power maneuver to push back against bitcoin acceptance.
VanEck Strategic Adviser Gabor Gurbacs said that “there is an all-out fight” against local banks and cryptocurrency. This, he argued, is a “show of force to urge compliance,” citing the recent publication of the United States’ updated CBDC report.
The newly announced Bank Fund Term Program (BFTP) would not cover the sorts of assets often held by these smaller companies, which puts pressure on regional banks, as highlighted by former BitMEX CEO Arthur Hayes.
Hayes disagrees with Gurbacs’s pessimism about regional banks and claims the Fed will bless all bank assets in the future.