Coinbase Challenges SEC
• Coinbase, the largest bitcoin trading venue and crypto exchange in the U.S., has filed a petition against the U.S. Securities and Exchange Commission (SEC) in a federal court to demand more regulatory clarity for the crypto industry.
• Last month, Coinbase received a Wells notice from Gary Gensler’s SEC notifying them of an impending enforcement action due to possible violation of its securities law.
• Coinbase has decided to take a proactive approach towards tackling this issue by filing a lawsuit against the agency to compel it to respond yes or no to its previous petition asking for guidance on cryptoassets that are securities, registration of issuers, mandatory disclosures, exemptions, and registration of exchanges.
Background
Coinbase is the largest bitcoin (BTC) trading venue and crypto exchange in the United States by trading volume. The Brian Armstrong-led exchange had earlier made it clear that they will not hesitate to slug it out with the agency at court rather than be bullied into pleading guilty for an offense they never committed. This led them to file a narrow action suit against the SEC last month.
Coinbase’s Petition
The lawsuit seeks for the SEC to “respond yes or no” to its previous petition asking for guidance on which cryptoassets are securities, registration of issuers, mandatory disclosures, exemptions, and registration of exchanges. In July 2022 Coinbase identified these key areas as well as offering more specific suggestions about potential registration paths for digital assets subject to registration in over 30 meetings with the SEC throughout last year but have yet been denied any feedback or taken any action since then.
SEC’s Stifling Action
Despite Coinbase’s attempts at gaining regulatory clarity from their issues with Gary Gensler’s SEC they have still been met with stifling actions from their enforcement arm rather than being granted any form of response or feedback regarding their petitions submitted over nine months ago now.
Conclusion
In conclusion it is clear that Coinbase is taking a proactive approach towards tackling this issue as they believe that regulation should come through rulemaking processes rather than through enforcement actions taken upon legit crypto market participants who are trying hard enough already just trying navigate this ever changing landscape..