The industry lost its cool soon after the collapse of FTX was reported. The alleged misdeeds of Sam Bankman-Fried are likely to go down in history as the biggest fall the industry has ever seen as a result. Cardano co-founder Charles Hoskinson admitted in his tweet that he was aware that the entire industry would suffer after the collapse of FTX.
The tweet refers to the SEC taking strong action against crypto projects, especially exchanges. The US Securities and Exchange Commission, or SEC, has actually taken action against not only FTX but Kraken and Paxos as well. This has raised concerns over the future of cryptocurrencies, especially in the United States.
One of Charles’ tweets was in response to a user asking about the epicenter of the pushback. Kraken was once a leader in the industry, but later had to shut down its staking services and settled a dispute with the SEC by paying a $30 million fine. The staking services of Kraken were shut down on February 08, 2023 and since then there has not been a word about its revival.
It all started with Kraken, when the SEC launched an investigation into whether the platform violated any securities laws. Reportedly, the SEC concluded that unregistered securities were being offered to customers, therefore creating an uncertain environment that could eventually have macroeconomic effects on the economy.
Once the best US crypto exchange, FTX’s customers have stuck their funds on the platform. The withdrawal process has been put on hold, and a payback plan is being drafted as of the last notice.
Paxos and Binance have been victims of SEC takedown action. The platforms were told to stop mining the new BUSD token. He has obeyed orders; However, customers can avail the redemption of their tokens till February 2024. Mining of new BUSD will be halted from February 21, 2023, with the Paxos Trust continuing to manage the reserves.
Coinbase has also been forced to issue clarification on its staking services. The claims and questions were raised by the SEC. Coinbase CEO Brian Armstrong responded by claiming that his company’s staking services are not securities.
Paul Grewal took on a large part of the leadership of the initiative by ensuring that all investors are provided with important information. In all cases, the customers retain ownership, and Coinbase does not claim ownership.
The two sides swung from side to side, making it appear that the SEC needed nothing more. A statement from Coinbase is expected to confirm the assumption.
In America, the future of cryptocurrency is uncertain. Brian Armstrong has even argued that banning retail consumers would be a bad move for the country. While this will eventually become clear, it is safe to predict that the cryptocurrency market will remain volatile for a few more years.
