The SEC rocked the crypto universe this week, with some insiders expressing concern that its lawsuits against two industry giants could be the beginning of a regulatory crackdown that may end crypto in the U.S.

In the latest episode of The Chopping Block, the Blockchain Association’s chief policy officer Jake Chervinsky offered a detailed analysis of the lawsuits against Binance and Coinbase, two of the largest cryptocurrency exchanges. The cases, brought forth by the U.S. Securities and Exchange Commission (SEC), accuse the platforms of running unregistered exchanges and engaging in deceptive practices to evade U.S. laws.


“They [the SEC] have decided to throw down the gauntlet and say: ‘We’re not trying to regulate this industry, we’re trying to kill this industry’,” Chervinsky said.

The SEC has labeled more than a dozen tokens as securities, further fueling these fears. However, Chervinsky offered a more nuanced perspective. He said that the initial reactions may be overblown and that the situation is not as dire as some fear.

“People were sort of shocked to see that this it’s business as usual until this case gets resolved and this case is not going to get resolved for at least two or three years, maybe much, much longer than that,” Chervinsky stated.

He also underscored the prevailing sentiment that the situation is unlikely to provide the desired clarity. He anticipates that the real resolution will emerge from legislative actions in Congress. “There’s going to be a lot more focus [in Congress] going forward,” he said.

Looking ahead, the question on everyone’s mind is: Who’s next? While Chervinsky didn’t specify who might be next, he explained that regulatory agencies like the SEC typically start their enforcement actions with the “low-hanging fruit” — entities that have clearly violated the law and lack the resources to mount a robust defense. This approach allows the SEC to secure a win, either through a court order or a settlement agreement, that sets a legal precedent favorable to them.

Chervinsky traced this pattern in the SEC’s actions in the crypto industry, starting with the Ether Delta settlements in 2018, where the SEC declared Ether Delta as an exchange trading tokens that are securities. From there, the SEC escalated its enforcement actions, targeting more brokers and exchanges, including Beaky and Bittrex. The culmination of this strategy is the current lawsuits against Coinbase and Binance.

Chervinsky raised an important question about the SEC’s next steps. Given the agency’s limited resources and the magnitude of the cases against Coinbase and Binance, it remains to be seen how the SEC will allocate its resources moving forward, and whether it will continue to work its way down the list — or shift its focus elsewhere.