Crypto lawyer: It’s Really Hard to Navigate without Any Clear Rules

• Mike Selig said the SEC finds it hard to handle crypto without clear directions.
• The crypto lawyer believes the SEC’s action against Paxos and BUSD is an example of such challenges.
• Last week, the US SEC alleged that the BUSD was an unregistered security.

In a recent interview,  crypto lawyer Mike Selig argued that the US Securities and Exchange Commission (SEC) would find it challenging to regulate crypto without clear rules. Selig suggested that the SEC’s action against Paxos and BUSD is another example of the industry’s challenges due to the lack of clear regulations.

Last week, the Wall Street Journal revealed that the US digital asset regulator sent a Wells Notice to Paxos Trust Co, the issuer of the Binance stablecoin, BUSD. According to Investopedia, a Wells Notice is a document to inform a company of an impending enforcement action.

Additionally, a prospective defendant is allowed 30 days after receiving a Wells Notice to respond via a legal brief to argue why the charges should not be brought against them.

In the document, the US SEC claimed that the BUSD was an unregistered security. However, a Paxos spokesperson disagreed with the SEC that BUSD was not a security token, adding that the firm would prosecute the matter vigorously if forced.

Previously, the CEO of Binance, Changpeng Zhao, argued that the BUSD issuer was under the New York Department of Financial Services (NYDFS) regulation.

Since the commencement of the regulatory action against BUSD, its market share has lost over two billion dollars. Consequently, BUSD has lost a position in its ranking of the most significant token by market cap.

A crypto trader theorized that the absence of the Binance stablecoin on the market would put the Binance coin, BNB, in a better position. “They don’t know less BUSD use [means] bullish BNB,” the trader argued — people would “need to buy and hold more BNB for fees discount” on the spot market.