Illegal Tokens Listed: US Cryptocurrency Exchanges Are Going Against The SEC

Blenda Rosen
Blenda Rosen Finance
2 Min Read

A Wall Street Journal article suggests that the US crypto exchanges have listed some tokens that were declared illegal by the Securities and Exchange Commission (SEC). These unregistered securities are digital tokens that the SEC does not consider commodities under their regulatory framework in the US.

illegal tokens listed us cryptocurrency exchanges are going against the sec 2

Wall Street Journal Suggests that there are 76 Tokens that are Illegal

According to the Wall Street Journal article, these 76 tokens are declared illegal because they have been illegally distributed and sold to the populace, violating US investor protection laws. 16 of these tokens that are considered securities are still trading on many major cryptocurrency exchange registered in the US, even after several tokens were removed from these exchanges following the regulations of the SEC.

Among these tokens is XRP, which was made unavailable to the US users by major US exchanges of Coinbase and Kraken. From 76 security tokens that have been traded in the US, 37 have been involved in fraud, the article also states.

US Regulatory Institutions are Going Rough on Cryptocurrencies

Various US regulatory institutions also agree to take a harsher stance against cryptocurrencies, but some people suggest that the SEC’s restriction on many of these tokens could be part of an effort by the SEC to increase its influence over the cryptocurrency field. Under these circumstances, the SEC’s authority only reaches to regulate these securities. Assets that are classified as commodities, including Bitcoin, are not under the regulation of the SEC, but under the CFTC.

The recent activities of the US regulators regarding the cracking down on many cryptocurrencies led some people to think that there might be an “Operation Choke Point 2.0” going on in the industry. Some of the developments in the recent crackdowns include the Wells Notice that Coinbase was served with by the SEC, and a lawsuit against Binance and Changpeng Zhao, the CEO of Binance by the CFTC.

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Blenda Rosen
By Blenda Rosen Financial Writer
Hi there! My name is Blenda, and I'm a Personal Finance and Markets Reporter at California/USA Today. I graduated from San Jose State University with degrees in Business Administration and International Business, and I'm a Certified Public Accountant (CPA) in California. My passion is creating personal finance content that resonates with my readers. I know from experience how daunting managing personal finances can be, and I aim to provide actionable advice that people can use to improve their financial situations. Whether it's budgeting, saving, investing, or retirement planning, I'm here to help my readers make informed decisions about their money. As a financial journalist, I'm always seeking to expand my knowledge and skills in the field. I'm particularly interested in areas like venture capital, startups, fintech, payment methods, and international banking. I believe that staying up-to-date on the latest developments in the industry is crucial to providing valuable insights to my readers.
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