As a reminder, the US Securities and Exchange Commission's attitude towards cryptocurrencies is not the best. As it became clear over the weekend, SEC chief Gary Gensler sees almost all coins as securities. The logic for this view is that there is a development team behind a particular project and buyers are expecting digital asset prices to rise.

However, Bitcoin does not fall into this classification because the cryptocurrency was launched by an anonymous developer.

However, such an approach is unlikely to lead to anything. According to lawyers, Gary Gensler’s opinion is not the law, and it is up to the court to determine whether cryptocurrencies are securities. Moreover, this will have to be done on a project-by-project basis, which means that the Commission will have to prepare for lengthy court proceedings – if its representatives, of course, take such a step.

How regulators deal with cryptocurrencies

To begin with, let’s clarify that the investigative subpoena requires the defendant to appear in court to testify or provide documentation during the investigation. Robinhood received a similar subpoena from the California Attorney General’s Office. On that occasion, state representatives inquired about the status of client assets, client disclosures and coin listings.

The Commission’s action followed the collapse of cryptocurrency exchange FTX in November last year. That said, Robinhood admits that the company will have to comply with the regulator’s decision, even if it is drastic as a result of the investigation. Here is the relevant rejoinder from company representatives.

To the extent that the SEC or a court determines that any cryptocurrencies backed by our platform are securities, this ruling could prevent us from continuing to support the trading and holding of those assets.


Note that the Commission could indeed create problems for cryptocurrency platforms. Earlier in February, because of its activism, the exchange Kraken shut down staking for US citizens. In addition, it paid a $30 million fine to avoid a lawsuit.


According to Decrypt sources, 18 cryptocurrencies are traded on the Robinhood platform, including Bitcoin, Etherium and Dogecoin. Most of the coins could, in theory, be recognised by the Commission as altcoins – as we’ve noted, this was previously hinted at by Commission chairman Gary Gensler.

Now the Commission continues to press the crypto industry, essentially just covering up the FTX incident. The bankruptcy of one of the largest exchanges has badly damaged the reputation of digital assets, so now the Commission has been given the power to do anything. It has previously caused Paxos to halt the issuance of BUSD Stablecoin.

Amusingly, not only did the Commission's leadership fail to prevent FTX fraud, but it also actively engaged with the platform's founder Sam Bankman-Friede. After all, it was he who had previously appeared before the US Congress and talked about how cryptocurrencies are more transparent than traditional finance thanks to blockchain. And while this is true, Sam was able to pull off a fraudulent scheme under everyone's noses, hiding behind a supposed respect for the law.

It’s also worth noting that Gary Gensler’s recent comments about altcoins allegedly being securities are essentially indicative of his bias against digital assets. Accordingly, he should not be involved in such proceedings because of his predetermined position. Well, it will be up to the court to decide whether an asset is a security one way or the other.

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The Commission’s pressure on crypto doesn’t make sense, because especially in the US there are many other issues that need to be addressed. For example, economic inequality. According to a recent survey by cryptocurrency exchange Coinbase and firm Morning Consult, 80 per cent of Americans believe that the financial system’s pull towards the wealthy class is a serious problem. Meanwhile, 20 percent of respondents admitted to owning cryptocurrencies, Cointelegraph reported.

The survey was conducted among more than 2,000 Americans. In addition to a portion of those who were completely disillusioned with the US economic environment, another 67 percent of respondents called for serious reforms. About a third of survey participants plan to purchase cryptocurrencies in the foreseeable future.

As Morning Consult analysts point out, the number of crypto owners in similar surveys has not changed significantly since January 2022. That is, last year’s market decline hasn’t particularly shaken Americans’ confidence in the prospects for digital assets.

On a generational basis, zombies, that is, those born between 1997 and 2013, traditionally lead in terms of the number of cryptocurrency fans. 36 per cent of respondents in this category own crypto. Among millennials, the same figure is slightly lower, at 30 percent.

The analysts backed up the survey report with the following commentary.

African-American and Hispanic adults are significantly more likely to have a favorable impression of cryptocurrencies and are more optimistic that “crypto and blockchain are the future.”

Among crypto investors, 65 percent of respondents are convinced that the best days of the industry are yet to come. 76 per cent agree that digital assets and blockchain technology are the next stage in the development of finance and other areas of human life.


We believe this approach by the SEC will lead to problems for the regulator itself, which will lose its credibility. Still, Gary Gensler failed in 2022 to prevent investors from losing money with the collapse of Terra, BlockFi, Voyager, Celsius, FTX and other platforms, although it certainly should have been addressed. And now, for some reason, the authority has decided to cause problems in general for all industry participants, which in the short term will only lead to court cases. Whether Gensler will be able to retain his position until the trials are over is a big question.