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The Commodity Futures Trading Commission&#39;s (CFTC) action against Binance on Monday surprised some and irritated others. Binance users, such as US-based prop shops with offshore accounts and BNB token holders, are among those who are irritated. But, more importantly, it is those who want the United States to create a comprehensive framework for cryptocurrency and to stop ruling by enforcement.U.S. Rep. Tom Emmer (R - Minnesota) introduced the Securities Clarity Act in 2020, a calendar year ago but centuries in crypto time, with the goal of creating a new legal category called &#34;investment contract asset.&#34; &#34;This new term would refer to any asset sold as part of an investment contract that would not be considered a&#39;security&#39; but for its sale as part of an investment contract,&#34; Emmer&#39;s website stated in September 2020.It was effectively a framework for crypto similar to what the Monetary Authority of Singapore has developed, or what authorities in Hong Kong and Taiwan are working on: rules made in the 2020s for an asset class of the internet era, rather than relying on an interpretation of a 1946 court case.&#34;The fact remains that digital assets such as cryptocurrencies do not fit neatly into the SEC&#39;s regulatory framework,&#34; wrote Bo Howell, an Ohio-based securities lawyer, in a January 2022 post explaining the disputed authority over crypto. Instead, we have enforcement-based regulation. Attempts to impose rules through court rulings rather than a rulebook available to all parties.The SEC is attempting to establish a comprehensive definition for securities that includes the majority of cryptocurrency tokens as part of a legal proceeding involving an ex-Coinbase staff member accused of insider trading by pursuing securities fraud allegations against the former employee.&#34;The SEC&#39;s suit is based on the incorrect assumption that the seven Coinbase-listed assets identified in its complaint are&#39;securities.&#39; However, Coinbase does not list any securities on its platform,&#34; according to an amicus brief filed by Coinbase in March as part of the case. &#34;The SEC claims that digital assets are securities because they are &#34;investment contract[s], but the assets lack both essential characteristics of that statutory term: they are neither contracts nor investments.&#34;In December, something similar occurred. As part of a complaint against FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison, the SEC argued that FTX&#39;s exchange token, FTT, is a security. The two are pleading guilty and intend to cooperate with authorities, which means the SEC&#39;s allegations will not be tested in a courtroom.The SEC has not provided Coinbase - or any other exchange - with anything resembling the rulebook they requested. There is no official code to read; instead, lawyers must interpret court filings and read the tea leaves to determine possible interpretations.&#34;This ongoing and ever-changing regulatory environment impedes well-designed compliance and regulatory plans,&#34; Braden Perry, a former CFTC attorney, said in an interview with 2020.His analysis is still valid today. &#34;The last thing any industry wants is what the SEC and CFTC have done: regulation by enforcement,&#34; he continued.Rep. Emmer told CoinDesk in January 2023 that more legislation is on the way. Hopefully, the right kind, and not the kind that drives an industry offshore. &#34;Obviously, we&#39;re going to focus on legislation, and I think it&#39;ll be to put key guardrails around the industry,&#34; Emmer said. &#34;Market structure barricades. Guardrails for stablecoins. That sort of thing.&#34; Right now, this appears to be positive for Asia. China&#39;s state-owned banks are soliciting crypto business in Hong Kong, which would be unheard of or even considered absurd if mentioned years ago.

First Mover Asia: Will CFTC's Action Against Binance Benefit Crypto’s Asia Narrative?

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