Home Crypto Events Government Crackdown on Crypto Sends Shockwaves Through Industry: SEC, FBI Take Aim While Franklin Templeton Launches OnChain Fund

Government Crackdown on Crypto Sends Shockwaves Through Industry: SEC, FBI Take Aim While Franklin Templeton Launches OnChain Fund

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In a week of high drama for the crypto world, the U.S. government has escalated its efforts to regulate the burgeoning industry, causing ripples of concern and uncertainty among investors and enthusiasts alike.

The Securities and Exchange Commission (SEC) made headlines by taking aim at Ethereum, declaring it a security and igniting a legal battle with blockchain giant Consensys. The SEC alleges that Metamask, a popular Ethereum wallet operated by Consensys, functions as an unregistered securities exchange, adding fuel to the fire of regulatory scrutiny.

Meanwhile, the Federal Bureau of Investigation (FBI) issued a stern warning, advising Americans to steer clear of crypto services that aren’t registered as Money Services Businesses under federal law. This directive effectively excludes self-custodial services, raising questions about the future landscape of decentralized finance.

SEC Takes Aim at Ethereum: The Securities and Exchange Commission (SEC) has unleashed its regulatory might on Ethereum, declaring it a security. This move has sent shockwaves through the crypto community, with Consensys retaliating with a lawsuit to challenge the SEC’s assertion. Amidst the fray, the SEC has also targeted Metamask, alleging that it operates as an unregistered securities exchange, prompting further legal skirmishes.

FBI Issues Crypto Warning: Adding fuel to the fire, the Federal Bureau of Investigation (FBI) has issued a stern warning to Americans, advising them to only use crypto services registered as Money Services Businesses under federal law. This directive effectively sidelines self-custodial services, raising concerns about the erosion of privacy and financial autonomy in the digital realm. The government’s aggressive stance has drawn criticism, with some labeling it as a “gross abuse of power” in crypto cases.

Franklin Templeton’s Groundbreaking Move: Amidst the regulatory maelstrom, Franklin Templeton, a renowned fund, has made waves by launching an onchain money market fund. With a hefty size of $380 million, the Franklin OnChain U.S. Government Money Fund has made its debut on both Stellar and Polygon blockchains. The fund’s BENJI token offers investors a direct claim on government securities, cash, and repurchase agreements, signaling a new frontier in blockchain-based financial instruments.

The government’s aggressive stance hasn’t gone unnoticed by the courts, with some judges condemning what they perceive as a “gross abuse of power” in recent crypto-related cases. This growing tension between regulators and industry players underscores the need for clarity and collaboration in navigating the complex regulatory environment.

Amidst the regulatory storm, Franklin Templeton, a prominent investment fund, made waves with the launch of its OnChain U.S. Government Money Fund. This innovative fund, valued at $380 million, leverages blockchain technology to offer investors direct access to government securities, cash, and repurchase agreements.

The Franklin OnChain fund, available on both the Stellar and Polygon blockchains, introduces a new paradigm for asset management, bridging traditional finance with the decentralized world of cryptocurrencies. By tokenizing assets and leveraging blockchain infrastructure, Franklin Templeton aims to enhance transparency, accessibility, and efficiency in the management of investor funds.

However, not all news in the crypto space is as positive. Changpeng Zhao, the former CEO of Binance, finds himself embroiled in legal troubles as the U.S. Department of Justice (DOJ) seeks a three-year prison sentence over allegations of sanction violations and anti-money laundering failures at the exchange.

Despite Zhao’s defense claiming ignorance of the specific transactions in question, the prosecution argues that his leadership failures contributed to significant compliance lapses at Binance. In a bid to mitigate the severity of the sentence, Zhao issued a heartfelt apology letter, pledging to address compliance shortcomings and improve regulatory adherence at the exchange.

Support for Zhao’s plea for leniency has poured in from various quarters, including family members, friends, and influential figures from around the world. The outpouring of support underscores the significance of Zhao’s case as a focal point in the ongoing debate over regulatory oversight and accountability in the crypto industry.

As the regulatory landscape continues to evolve and the crypto industry grapples with heightened scrutiny, stakeholders must remain vigilant and proactive in addressing compliance requirements and regulatory expectations. The coming weeks and months are likely to bring further developments and challenges, shaping the future trajectory of the crypto market and its relationship with regulators.

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Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

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