US SEC's move to Coinbase shows that there is a regulatory vacuum for cryptocurrencies

The gray area of ​​US cryptocurrency regulation: Coinbase lawsuit withdraws double impact with Bybit hacking

The withdrawal of the US Securities and Exchange Commission's lawsuit against Coinbase marks a new phase of uncertainty in U.S. cryptocurrency regulation. Coinbase CEO Brian Armstrong claimed that the company had no need to pay a fine or change its business operations and had previously invested about $50 million in litigation. The incident seems to imply that the SEC is suspending its ten-year-old securities rules, awaiting Congress to enact new cryptocurrency regulations. However, the legislative process of Congress is long, and this "regulatory vacuum" may last for quite some time.

Although Coinbase's victory news has boosted the cryptocurrency market, Bybit's hacking of more than $1 billion quickly extinguished optimism. This is one of the largest hacking incidents in cryptocurrency history, triggering a panic sell-off in the market. Although Bybit CEO Ben Zhou claimed that the company had enough funds to deal with it, both Bitcoin and Ethereum prices remained falling, and Coinbase's stock price also reversed, falling 8% in the afternoon.

This incident highlights the inherent risks of the cryptocurrency industry and indirectly proves that the risk control mechanism of traditional financial institutions is more perfect. Traditional financial institutions such as Nasdaq have previously expressed concerns to regulatory authorities, demanding a clear regulatory deadline for cryptocurrency exchanges and hope to launch their own cryptocurrency businesses as soon as possible. Banks also want to provide cryptocurrency services to avoid losing customers. However, they must comply with strict banking regulations.

Recently, bank lobby groups have also put pressure on the government to avoid lagging behind in cryptocurrency competition. The withdrawal of the dual incidents of the Coinbase lawsuit with the Bybit hacking not only exposed the vulnerability of the cryptocurrency market, but also highlighted the advantages of traditional financial institutions in regulation and risk management. In the future, how to balance innovation and risk in the cryptocurrency field will be an ongoing challenge.

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