This Monday, the SEC sued Binance, the biggest global crypto exchange, and its founder Changpeng Zhao, for operating an illegal securities exchange. On Tuesday, the SEC sued Coinbase Inc., the biggest US crypto exchange, for operating an illegal securities exchange. There are basically two ways for a crypto exchange to get in trouble with the SEC. The good way is that you get in trouble for running an illegal securities exchange. In April, the SEC sued Bittrex Inc. for allegedly operating an illegal securities exchange; any reasonable reading of the Bittrex case made it clear that similar cases were coming against Coinbase and Binance. Just being a crypto exchange in the US is, in the SEC’s eyes, illegal. The bad way is that you get in trouble for stealing all the money. Last December, the SEC sued FTX Trading Ltd., a big crypto exchange. The SEC thinks that FTX operated an illegal securities exchange in the US. But the focus of the complaint is that FTX allegedly stole all the money. When an exchange steals all the money, the SEC focuses on that. When it doesn’t steal all the money, the SEC focuses on the illegal securities exchange stuff. And so one question about this week’s cases is: Is the SEC suing Coinbase and Binance for being crypto exchanges, or for being bad crypto exchanges? Is the claim here “you let people trade crypto, which we think is illegal,” or is it “you let people trade crypto and steal their money”? At this point, SEC Chair Gary Gensler cemented himself as No. 1 on the crypto industry’s “Most Wanted List” this week. Not only did he sue Binance and Coinbase, he also went on CNBC to argue that cryptocurrencies and digital tokens don’t have a reason to exist, given that fiat currencies like the US dollar, the yen, and the euro are “all digital right now.” The twist? Gensler taught a course on bitcoin and blockchain at MIT in 2018.