The SEC has taken action against companies in the crypto space for launching and marketing their projects without the input of crypto-savvy lawyers. In July, the SEC opened an investigation into Coinbase, alleging that the company listed nine tokens that the agency considers unregistered securities. In November, the SEC won its case against LBRY when a court determined that the company committed securities violations by launching and selling its native LBRY Credits (LBC) token.
Many in the space see the advance of federal regulators and a lack of clear regulation as signs that more and more U.S.-based crypto projects will relocate to crypto-friendlier countries. However, Rubin said that this will not necessarily protect Web3 developers from the long arm of American law enforcement.
In September, the SEC sent shockwaves through the crypto space when the agency claimed that it had the right to sue Ian Balina, a crypto influencer, for failing to register a cryptocurrency as a security in 2018. Balina’s case is controversial in part because the agency alluded that the U.S. government has jurisdiction over all transactions on the Ethereum network.
