Coinbase vs. SEC: Crypto Exchange Calls for Clear Rules
The battle between the cryptocurrency industry and the U.S. Securities and Exchange Commission (SEC) continues. In a recent court filing, major cryptocurrency exchange Coinbase accused the SEC of harming the industry through its approach to regulation.
Coinbase: SEC Aims to “Choke” Crypto
Coinbase argues that the SEC is prioritizing enforcement actions over creating clear rules for cryptocurrency companies. They believe the SEC’s goal is to stifle innovation in the crypto space by making it difficult for companies to operate.
“The SEC is serious about harming digital assets,” Coinbase stated in its court filing. They claim the SEC isn’t interested in working with the industry to establish fair and transparent regulations.
Coinbase Points to Unclear Regulations
Coinbase argues that the SEC’s current rules are unclear and leave companies unsure of how to comply. The exchange argues that the SEC doesn’t seem to care about the difficulty these unclear rules pose, pointing to the agency’s past enforcement actions against other crypto firms.
Coinbase further emphasizes this point by citing the opinions of some SEC commissioners who are also critical of the agency’s approach. One SEC commissioner, Hester Peirce, recently proposed a program that would allow U.S. and U.K. blockchain companies to experiment with new technologies. This proposal suggests some within the SEC recognize the need for a more flexible approach.
The SEC argues its regulations, while new, are workable. They claim their enforcement actions only target companies clearly violating existing rules. The SEC also downplays the impact of its approach, suggesting only a small number of crypto companies might face challenges complying with current regulations.
The Lawsuit Continues
This disagreement forms the basis of a legal battle between Coinbase and the SEC. The SEC sued Coinbase in June 2023, alleging the exchange operates as an unregistered broker and securities exchange. Coinbase has tried to have the case dismissed, but so far, has been unsuccessful.
The outcome of this lawsuit could have a significant impact on the future of cryptocurrency regulations in the U.S.
