Could Coinbase and Binance Ever Be Legal Exchanges?: Editorial

The Securities and Exchange Commission has fired a major new salvo in Chair Gary Gensler’s war on crypto, declaring illegal two of the world’s largest digital-token trading platforms, Binance and Coinbase. It’s a welcome development: In myriad ways, the two enterprises exemplify what financial intermediaries shouldn’t do. What’s needed now is an actual rulebook.

The SEC complaints, filed in federal court, read like a catalogue of what’s wrong with the intermediaries through which most US investors interact with crypto. Both Binance and Coinbase sold products that had the features of securities, without registering as such. Much like the now-defunct FTX, ...