The Security and Exchange Commission (SEC) has sued Binance and Coinbase, two of the biggest crypto currency exchanges, Mashable reports. The SEC alleges that both firms have been dealing in unregistered securities, propping up the value of their crypto currency by repeatedly selling and buying their assets to inflate their value. The Binance CEO in particular is accused of fraud. SEC lawsuits are only a regulatory remedy, the Department of Justice and the FBI could still launch an investigation and charge relevant executives for wire fraud among other crimes.
Crypto has been free falling since the Federal Reserve has been raising rates, as investors find safer harbors to park their excess cash. Bitcoin, the foremost cryptocurrency with the greatest claim to legitimacy, still sees wild fluctuation on a daily basis, making it a speculative asset rather than a stable form of wealth building or a currency like the dollar.
Crypto technology reached its absurd limit with Non Fungible Tokens (NFTs). In theory, these unique identifiers could serve as a digital means to validate ownership of useful products. Instead, low grade digital art was “sold” for tens of thousands of dollars in some instances, where the “owner” only possessed a string of digital characters purporting to own a digital image, which was not recognized or enforced by any legal authorities such as the Patent and Trademark Office.
The Crypto collapse is part of a greater weakness in the global financial system. Back in March 2023, the Silicon Valley Bank collapsed, further consolidating banking services into larger institutioins. Federal Reserve rates continue to climb, making borrowing difficult for people, while inflation continues to eat at people’s wallets.
While crypto currency’s wild days might be over soon, the technology behind them has only continued to grow. The development of passkeys, for example, uses cryptographic technology to enhance online account security and provide identity verification services. Such developments are welcome in a world where identity online is difficult to prove yet evermore important.
