Regulation
Coinbase says SEC is ‘stifling’ the crypto industry
Coinbase has stepped up its push for the U.S. Securities and Exchange Commission (SEC) to initiate formal regulation for digital assets.
In its final brief on May 31, the cryptocurrency exchange called on the appeals court to force the financial regulator to establish clear regulations for the emerging industry.
Coinbase questions SEC regulatory approach
Coinbase claims that the SEC Enforcement Strategy leaves crypto companies in a “Catch-22”. The exchange says the SEC is demanding compliance with an overly broad interpretation of its authority while aggressively pursuing lawsuits against companies. Coinbase argues that the SEC is imposing major policy changes through punitive measures, thereby overstepping its bounds.
In its brief, Coinbase claims that the SEC’s approach violates the Administrative Procedure Act (APA), which mandates rulemaking for significant policy changes. The brief points out that the SEC inconsistent policies on digital assets lacks a consistent legal standard, making compliance unfeasible for the industry.
“The SEC exploited [regulation-by-enforcement] approach to asserting broad, but ill-defined, jurisdiction over a new and dynamic industry, without articulating in advance its understanding of the law through rules approved by public comment and judicial review prior to enforcement” , Coinbase declared.
Learn more: Best Coinbase Alternatives in 2024 for Crypto Trading
Additionally, Coinbase General Counsel Paul Grewal reiterated this position on social media, emphasizing the importance of the legal battle. He argued that the Commission failed to provide substantial reasons to reject the company’s call for tailored regulation. Instead, Grewal claimed that the The SEC exceeds its authority without congressional authorization and establishing clear rules for the emerging digital asset sector.
“It’s notable that the SEC says – time and time again – that it doesn’t matter if the industry can comply with the rules. The SEC is determined to stifle the digital assets industry and refuses to provide the necessary rules the industry has requested in order to tighten the squeeze,” Grewal asserted.
Learn more: Coinbase Review 2024: Best Crypto Exchange for Beginners?
Coinbase filed its regulatory petition against the SEC two years ago. Initially unresponsive to the petition, the regulator said it could not be forced to create specific cryptography rules. However, Coinbase and other crypto players have consistently argued that the lack of rules harms the industry. The outcome of this legal battle could have a significant impact on the future of digital assets in the United States, influencing regulation for many years to come.
Disclaimer
In accordance with the Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and current information. Readers are, however, advised to independently verify the facts and seek professional advice before making any decision based on this content. Please note that our Terms and conditions, Privacy PolicyAnd Disclaimer have been updated.