While legislation can have some impact on the digital asset industry in the future, numerous enforcements are already making changes. Currently, there are different ongoing cases and their outcome could lead to a major overhaul in the country’s crypto space.

SEC v. Ripple Case Likely to Be Settled Out of Court

The most widely-followed case is the Securities and Exchange Commission v. Ripple case. The SEC is suing the company for hosting an illegal token offering by selling XRP tokens publicly. But looking at the latest developments in the case, it’s probable that it will be settled out of court. If that were to happen, it would be in favor of the country’s crypto industry. It would give crypto exchanges and other related companies some breathing room to continue operations.

On the other hand, the SEC settling out of court or losing the case to Ripple would set a precedent. This would make it difficult to go after other crypto companies and accuse them of similar charges.

SEC v. Wahi

The Securities and Exchange Commission sued an ex-Coinbase employee and two accomplices on insider trading charges. The securities agency argued that at least nine crypto coins listed on the Coinbase exchange were securities. This is an obvious example of regulation via enforcement and if the court accepts the argument, it could have major effects on the industry. If the SEC wins, they can easily pursue crypto exchanges for providing users with unregistered securities.

SEC v. Ian Balina

Through these cases, the securities agency is looking to establish a firm grip over the crypto industry. It’s doing so by making broad claims that can have significant consequences for the crypto landscape. In the case of SEC v. Ian Balina, the commission argued that ETH transactions must be classified as occurring within the US. The agency came to this conclusion due to there being more Ethereum nodes in the US than in any other part of the world.

If the court rules in favor of this argument, it’s likely that Ethereum transactions would fall under SEC jurisdiction. This would apply to transactions involving tokens that the SEC qualifies as securities. Moreover, their jurisdiction would apply regardless of where the counterparties are based.

CFTC Sues Decentralized Autonomous Organization

The Commodity Futures Trading Commission sued bZeroX and its token holders, charging the DAO with trading derivatives illegally. If the CFTC wins, it would be bad news for DeFi protocols. Token holders could be charged with unincorporated associations, and it would become impossible for DAOs to operate without the risk of prosecution.

There is also the Treasury’s sanction on the decentralized privacy protocol Tornado Cash, which has had the biggest effect on the industry so far. It’s the first time a government agency sanctioned a smart contract, with numerous crypto experts claiming that it’s unconstitutional.