Explained | Why is the U.S. SEC cracking down on crypto exchanges?

The story so far: The U.S. Securities and Exchange Commission is cracking down on cryptocurrency exchanges. Binance stressed its intention to defend itself “vigorously.” It pointed out that as a U.S. regulator, the SEC’s control over the trading platform was limited because Binance was not a U.S. company. “Any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong, and there is zero justification for the Staff’s action in light of the ample time the Staff has had to conduct their investigation,” said Binance, insisting that all user assets on Binance and affiliate platforms were “safe and secure.” Zhao, meanwhile, used the number ‘4’ to signal his Twitter followers to not give in to “FUD” - a crypto slang acronym referring to fear, uncertainty, or doubt - and said that the media had received the SEC complaint before he did. However, major crypto company heads have been wary of the SEC’s invitations for negotiation, especially in light of the SEC’s history of taking legal action against cryptocurrency companies it claims are breaching U.S. securities laws. In a detailed response to the Wells notice sent by the regulator in March, Grewal pointed out that the SEC, instead of developing a regulatory framework for crypto, is “continuing to regulate by enforcement only.” While the Binance and Coinbase lawsuits are different in their charges, they seem to have one common goal: the SEC’s intention to bring crypto exchanges under the U.S. securities law.