US cryptocurrency exchanges list more than a dozen digital coins that have been banned by regulators.
That’s according to a Wall Street Journal (WSJ) report Monday (May 8), which also notes that the number of cryptocurrencies labeled by the Securities and Exchange Commission (SEC) has nearly tripled over the past year.
The SEC can only regulate digital coins classified as securities, the report said, and SEC Chairman Gary Gensler said most cryptocurrencies are part of that designation.
According to the report, this means many of these tokens have been distributed illegally, since securities can only be sold to the public after they are registered with the SEC and the issuers have provided financial and risk disclosures.
As of late 2017, the SEC Securities and Exchange Commission and US courts have identified 76 cryptocurrencies as securities. Of those 76, 16 were available for trading on one or more major U.S. crypto exchanges, the WSJ said.
The report comes amid an ongoing conflict between the SEC and crypto companies who complain that the US is lagging behind other countries on digital asset rules.
Among them is Ripple CEO Brad Garlinghouse, who told CNBC at the Dubai Fintech Summit on Monday (May 8) that the US is being overshadowed by other countries in this area.
He added that by the time an SEC lawsuit filed against Ripple in December 2020 is settled, the company will have spent $200 million defending it.
“I feel sad — as a company that was incorporated in the United States, as someone who is a US citizen — that I feel sad about,” Garlinghouse said. “The US is being overtaken, not just a little, but a lot.”
The UAE has the Virtual Asset Regulatory Authority and the European Union has the Markets in Crypto Assets (MiCA), but the US has “put politics before politics,” he said.
Meanwhile, PYMNTS reported last week that the SEC has stepped up its enforcement against crypto companies led by Gensler.
In 2022, the agency filed a total of 30 cryptocurrency-related enforcement actions, a 50% increase from the previous year. And in the first few months of 2023, the SEC completed 13 enforcement actions, up more than 25% from the year-earlier numbers.
“In addition to shifting focus from individual tokens to trading platforms that cater to U.S. investors, Gensler has separately increased the number of enforcement attorneys in the SEC’s crypto unit — a move observers say suggests the SEC chair intends to pursue further charges in the coming months while his agency casts as wide a net as possible,” PYMNTS wrote.