Recent regulatory action against the cryptocurrency sector continues to pressure token prices.
That’s according to recent research by Bank of America, which — as CoinDesk reported Monday (June 19) — finds that pressure coming from uncertainty in the wake of legal action by the U.S. Securities and Exchange Commission (SEC).
The researchers found that excessive focus on regulatory headwinds, spot bitcoin exchange-traded-fund (ETF) approval in the U.S. and illegal activity is “overshadowing the rapid development and integration of distributed ledger and blockchain technology infrastructure.”
“Specifically private permissioned distributed ledgers and blockchain subnets,” that allow the tokenization of traditional assets, the research added.
The bank also projects that blockchain infrastructure and tokenization will “transform financial and non-financing infrastructure and markets over the next five to 10 years.”
The report comes days after news that bitcoin’s supply on crypto exchanges had hit a five-year low due to uncertainty following the SEC’s actions around Coinbase and Binance, the largest crypto platforms in the U.S. and the world respectively.
“As long as these #SEC lawsuits loom, this trend should continue,” market intelligence platform Santiment said on Twitter.
The SEC filed back-to-back suits against Binance and Coinbase two weeks ago, part of a broader crackdown by the agency on the crypto sector.
On June 5, the SEC filed suit against Binance, accusing the company and founder Changpeng Zhao of misleading investors, violating securities rules and mishandling investor funds.
Binance has said it was “disappointed” with the SEC’s decision to file the charges and would defend its platform.
On Saturday (June 17), the SEC announced that Binance and two affiliates have agreed to keep assets held for customers of Binance.US in the United States.
“Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement said in a news release.
Zhao said on Twitter that user funds “have been and always will be” safe on platforms that are affiliated with Binance.
Coinbase, meanwhile, was accused June 6, the following day, by the SEC of functioning as an unregistered exchange, brokerage and clearinghouse.
“The SEC’s central legal claim is that Coinbase has pocketed billions of dollars by collecting transaction fees from investors without the legally required disclosures and protections of securities registration — exposing its customers to risk,” PYMNTS wrote recently.
Coinbase has maintained that the SEC refuses to give it clear direction on how to register as a compliant trading platform.
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