Many of you have probably heard the name "SEC" when participating in the cryptocurrency market. However, not everyone understands the structures and effects of these agencies on the financial market in general.
In this article, let's join Trading Insight to clearly understand the structure and operation as well as the level of influence of Sec on the Crypto market.
What is SEC?
The SEC (Securities and Exchange Commission) or the US Securities and Exchange Commission is the federal agency that enforces US securities laws. This agency was established in 1934, after the Great Depression in 1929.
The Chairman of the US Securities and Exchange Commission is currently held by Mr. Gary Gensler, a name that has caused a lot of turmoil in the market today.
Today, the main goal of the SEC is to establish securities registration rules and monitor their implementation, protect the rights of investors and support them.
SEC Duties
The SEC acts as one of the central agencies of the US Government, is one of the four largest financial agencies and has a great influence on the traditional financial market (stock) as well as gradually having more great impact on decisions in the decentralized financial market.
Due to the enormous influence of the US financial market, which is one of the world's leading economic markets, traders around the world pay special attention to the regulatory agencies involved in it. For example, the SEC's lawsuit against the Binance exchange has shaken the entire crypto market.
The main goals that the SEC aims to include:
Monitor compliance with federal laws related to the market.
Protect the interests of investors, including preventing fraud, ensuring that securities products are operated in a transparent and safe manner for investors.
Monitor the stock market situation and establish a legal framework for the registration process.
Support for markets to ensure effective regulation and operations.
Support the development of the financial market by approving newly issued securities and bonds.
Control the information provided by companies to their investors.
Oversee corporate acquisitions within the United States.
Monitor private regulatory agencies and comply with legal and financial audit standards.
Structure of the SEC
SEC is organized with 5 departments:
Investment Management Department: regulation and supervision of investment funds and investment advisors.
The Corporate Financial Supervisory Organization ensures oversight and review of reports from issuers.
The Market Trading Department controls free trade participation.
The Legal Department conducts investigations into various violations.
Organization Research analysis on risk, market strategy and innovation.
Impact of the SEC on the Crypto Economy
Although the authority of this agency lies only in the United States, the United States is still the largest economic and financial center in the world today, so all decisions related to the domestic financial market have influence. huge impact on the global economy.
In particular, agencies specializing in the field of cryptocurrency are also directly supervised by the newly licensed SEC to operate in the United States.
Mr. Gensler said that the cryptocurrency market brings many risks. Currently, he only recognizes Bitcoin as a commodity, not a security. He also believes that the cryptocurrency industry needs to comply with established regulations and that the company must submit all its activities to the SEC. For example, issuing tokens, ICOs, and participating in trading on the exchange all need to be strictly managed.
In the "name" of protecting investors, the SEC with the power of chairman Gary Gensler has made many unfavorable decisions against the decentralized finance industry. Typically, two consecutive lawsuits with two leading CEX exchanges, Binance and Coinbase, accused a series of tokens of being "unregistered securities". The agency also said that Coinbase illegally made billions of dollars from organizing trading of coins on the securities list. This information raised a lot of fear among users, leading to a serious decline in the prices of a series of tokens, including Bitcoin.
Previously at the end of 2020, the SEC also announced a lawsuit against Ripple, the company managing the XRP token, alleging that Ripple had raised more than $1.2 billion since 2013 through the sale of unlicensed securities (XRP). permission.
Early 2023 also saw an SEC lawsuit against BUSD issuer PAXOS for claiming the stablecoin was an unregistered security. With this information, the price of stablecoin BUSD suffered a deep depeg and it took a few days to recover to its old peg.
In addition, because it also plays a role in controlling the financial market, the SEC is also gradually looking into the Stablecoin (USDT and USDC) and DeFi markets and requires relevant agencies to comply with regulations set forth by the commission. This.
summary
Through this article, you will get the latest information about the US Securities and Exchange Commission from its organizational structure, how it operates and how it impacts the decentralized financial market.
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