First on CNBC: SEC Chair Gensler on Suing Coinbase and Binance 6/6/23

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Jim Cramer (0:30)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:37)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Pretty steady pre-market. Apple and Coinbase are at the top of the news flow, but got some macro calls as well. Goldman cuts odds of a recession. Another S&P target hike, this time from BMO.

A roadmap, though, begins with Apple getting into the headset game, as you know, looking to bring mixed reality into the mainstream.

David Faber (1:00)

Plus the SEC's crypto crackdown. Bitcoin is dropping to its lowest level since March, as the regulator sues Binance and Coinbase. Chair Gensler joins us first on CNBC just a few minutes from now.

Plus Elon Musk says AI regulations are on the way in China. We'll discuss that.

Carl Quintanilla (1:20)

First up, we are gonna begin with breaking news this morning involving Coinbase, the SEC suing the crypto platform in Manhattan Federal Court, accusing it of operating as an unregistered securities exchange, broker and clearing agency. The regulator claims that it's since at least 2019 Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities. The move comes a day after the SEC sued Binance. We're gonna discuss all of that with SEC Chair Gary Gensler in just a few moments, Jim.

We're going back several years here in some of the complaint, just looking at the blatant, I guess, disregard for SEC laws.

Jim Cramer (1:59)

Yeah, now we want to really distinguish between Binance from last night, where the government's going after a very specific individual, talks about co-mainly, really basically running a criminal enterprise.

I think that when you look at Coinbase, David, what they're saying is, they're running an exchange that's illegal, an unregistered exchange, a little bit like the Bittrex decision from April. They do not charge Armstrong. They're not trying to close it down. There's no co-mainly. At the same time, this is the longer way to sweep against these businesses.

David Faber (2:36)

Does this go back to the basic contention that these are securities?

Jim Cramer (2:40)

Exactly. And there's a lot of belief that this is, I want to say some very harsh things about these people.

David Faber (2:50)

Which people?

Jim Cramer (2:51)

About Coinbase and Binance. Their belief is, why don't you show us what to do instead of charging us, making us regulated by prosecution?

Over and over again, over and over again, Gensler said, listen, we've shoved you. Register, just like if you were a stock.

And today is the day where he just says, enough already. We're not buying into your whole wrap that you have to, we have to play it your way. We're going to court, we're gonna say you're violating these exchanges, and register. Now, Binance can't, because Binance is crooked.

David Faber (3:24)

Well, Binance also really is a far, I mean, operates for the most part outside of US shores.

Jim Cramer (3:31)

But when you look at Binance, they list all the, we used to put a bug on the right side of our TV, had a series of currencies, of securities, that were not real, according to this document. They're not real, just manipulated pieces of paper, if they were anything.

David Faber (3:47)

Well, they were never pieces of paper. They were always digital.

Jim Cramer (3:49)

Well, you know, look, I'm not trying to joke around here. I think that this is just a massive fraud. And when you have an executive saying something that I can't even repeat, but I will, as Binance CCO bluntly admitted to another Binance compliance officer in December, 2028, we are operating as a curse word, unlicensed security exchange in the USA, bro, they have CEO A and CEO B on the inside.

Criminal enterprise.

Carl Quintanilla (4:15)

That's the line that stood out yesterday. How do we explain getting past the IPO process then?

Jim Cramer (4:21)

Well, what, for Coinbase? For Coinbase, yeah. Well, Coinbase, I think just they bulldozed their way in.

I think that they felt that they could break the law and never break the law. I mean, look, we'll listen to Chairman Gensler, but David, one of the things that's very clear about Coinbase, they're not trying to shut Coinbase down.