The SEC Kills Crypto Exchanges

After Bitcoin was released in 2009, the only way to trade it was to meet a friend at a coffee shop, open your laptops, and take out cash from your wallet. This trade was effective but clearly slow and inconvenient. Others felt the same way, and entrepreneurs realized there needed to be a better solution.

This effort was met with no resistance from regulators at the time. However, it is a demonstration of the defiance these so-called exchanges have against regulators by creating their own watered down set of rules. Next came the Bitcoin Cash insider job. Self-regulation does not work because there are no real-life consequences, such as criminal penalties.

Clearly, the notice will be ignored by most exchanges that are located in the United States or operating in other countries while allowing U.S. persons to use their service. Companies ignored the SEC while selling utility tokens through Initial Coin Offerings and now probably regret it.

This is clearly the future of trading. Today, tZERO (a StartEngine customer), which operates an ATS, has announced they raised over $100M with their ICO. Others have also announced they are working on an ATS that will trade crypto; however, none are live today. This gap is serious because should the SEC shut down most of the U.S. based exchanges, investors will have no place to trade their coins. Some coins such as Bitcoin may be not viewed as securities, but rather as rather a commodity, as the CFTC has proclaimed. This may allow investors to continue to trade Bitcoin, but the vast majority of coins will not have this benefit until 2.0 trading marketplaces launch.

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