JPMorgan: US crypto exchanges to register with the SEC

American bitcoin exchanges are highly likely to be required to register with the SEC as brokers, and all cryptocurrencies on the platforms would be classified as securities. JPMorgan strategists reached this conclusion, The Block reports.

Experts say the move is likely to place significant pressure on the industry. However, the firm argues that the approach has positives — digital assets would be subject to the same regulatory framework as traditional assets.

Earlier, the SEC brought lawsuits against Binance and Coinbase, accusing the platforms of selling unregistered securities.

JPMorgan analysts noted that the Commission’s actions intensify American lawmakers’ need to craft a clear regulatory framework. In their view, without clarity, crypto activity in the United States is likely to move offshore and into decentralised organisations, and venture funding for the sector will shrink.

New rules will free the industry from bad practice and unscrupulous players, which, in turn, is necessary for the industry to mature and see more active institutional participation, said representatives of the organisation.

In court filings, the SEC named more than a dozen tokens as securities. Experts say a regulator’s victory could lead to the delisting of these coins and constrain the potential development of their blockchains.

«Given that most of the tokens targeted by the SEC are competitors to Ethereum, the regulator’s actions raise the likelihood that the network will further strengthen its dominance in the blockchain space,» JPMorgan said.

Chair Gary Gensler has said that the crypto industry is rife with fraud and resembles the securities market of the 1920s before regulation.

Investor Kevin O’Leary said that the era of the Wild West for cryptocurrencies in the United States is over. In his view, the regulator’s lawsuits against trading platforms will be remembered as a watershed moment for the industry, ultimately helping the market become ‘more environmentally friendly’.

Cardano founder Charles Hoskinson also shared his views on the lawsuits. He believes the SEC’s case against Binance is motivated by a ‘political and philosophical disagreement’ between the agency and the very existence of cryptocurrencies.