Stable Digital Coins and DeFi projects are likely to be the next targets of SEC harassment. This was stated by analysts of the investment bank Berengerg.
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Berenberg: Stablecoins and DeFi could become targets for U.S. authorities
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The SEC could now file lawsuits against the issuers of the two largest stabelcoins by market capitalization, Tether (USDT) and USD Coin (USDC). The report says that by targeting the largest stabelcoins by market capitalization, the SEC could also weaken the decentralized finance ecosystem.
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“The SEC may target stablecoins, which are the source of decentralized finance’s existence,” the analysts wrote.
If USDC is targeted by U.S. regulators, the impact of the lawsuit on Coinbase’s cryptocurrency exchange revenue could be significant. For the first quarter 2023, the exchange received $199 million, about 27% of net revenues – from interest income from USDC reserves;
All of these restrictions, the report said, could cause the U.S. crypto industry to become more bitcoin-centric than in recent years.
In June, the SEC sued Binance, the largest cryptocurrency exchange, alleging violations of federal securities laws. And then to the competing exchange Coinbase. Both trading floors lost about $4 billion in less than a week, Nansen and Glassnode said;
Meanwhile, analysts at Santiment, which studies crypto investor behavior, note that trader sentiment has collapsed to the negative levels seen in March 2020.