Coinbase asked the US Securities and Exchange Commission (SEC) to define more about how the country’s securities rules apply to cryptocurrencies. The regulatory watchdog claims that the exchange’s demand is unreasonable and unsupported.
The largest cryptocurrency exchange in the US, Coinbase, filed a petition in federal court last month seeking legal redress against the Securities and Exchange Commission (SEC).
In the petition, the SEC was urged to provide clearer regulations and standards for the cryptocurrency industry.
In a court filing in response to Coinbase’s appeal, the SEC refuted the exchange’s claims that the organization had been overly sluggish to act.
The legal counsel for the commission contends that Coinbase is not entitled to exceptional relief because it would prefer a quicker or different course of regulatory action. They adamantly contend that the petition ought to be rejected.
The head of the Securities and Exchange Commission (SEC), Gary Gensler, has repeatedly stated that most digital assets are securities and that existing regulations are clear, while simultaneously pointing out that some crypto businesses have opted to violate them. The relationship between Coinbase and the SEC has significantly deteriorated as a result of the distribution of Wells Notices and accusations of questionable activities.
Paul Grewal, the chief legal officer of Coinbase, expressed his surprise at the SEC’s official justification of its position on enacting regulations for the cryptocurrency business in court. The SEC contends that modifications to regulations need thorough study and that there is no defined timeframe for the completion of its work. The commission argues that Coinbase has not experienced any loss as a result of the absence of action on its petition, pointing out that it may enforce current legal requirements while considering potential changes.
Concerns regarding the industry’s future and business model have been expressed in light of the SEC’s recent enforcement actions against crypto exchanges like Kraken and Bittrex. Early this year, Kraken settled with the SEC and ended its staking business in the US. A bankruptcy petition was made as a result of Bittrex being accused of running an unlicensed national securities exchange, broker, and clearing agency.
The request for regulatory advice and clarity from Coinbase reflects the ongoing ambiguity surrounding the regulatory framework for the cryptocurrency business in the United States.
Firms like Coinbase have been considering moving to more cryptocurrency-friendly nations due to the continued uncertainty surrounding the legal environment for cryptocurrencies in the United States.