The United States Securities and Exchange Commission (SEC) has been known to create confusion in the cryptocurrency market with its lack of clear regulations. This has caused a lot of uncertainty for cryptocurrency companies trading in the US as they are often left with no guidance on which way to go about their business.
Coinbase Challenges SEC: Seeking Clarity on Crypto Regulations
Coinbase, a leading cryptocurrency exchange, has now taken action by filing a petition to the SEC to get clearer crypto regulations. Coinbase demanded that the SEC answer 50 questions regarding the legal classification of certain tokens as securities. They have now filed an administrative procedure act challenge in the Third Circuit Court of Appeals against the SEC to order them to provide clarity.
The SEC’s response was a warning that they expect to sue the exchange alleging listing and offering unregistered securities products.
Coinbase is hoping that the SEC will provide clarity to the “existing SEC registration and disclosure requirements” and how those inapt and inapposite requirements can be applied to the digital assets. A sitting SEC Commissioner has even recognized that these current frameworks do not really apply to cryptocurrencies.
Pushing for Regulatory Clarity in Crypto Sector
The Crypto sector has been facing regulatory uncertainty and Coinbase is now taking a stand to push for these regulations to be clearer. Their filing urges the SEC to set forth how the traditional regulations should be adapted to apply to digital assets. Paul Grewal, Coinbase’s Chief Legal Officer, has also stressed the importance of a response from the SEC.
“It’s important for the SEC and any other agency petitioned for rule-making to respond to the petition once the agency has made up its mind, especially if the answer is no,” he said.
Furthermore, Coinbase and other crypto companies have been facing potential regulatory enforcement actions from the SEC, yet they do not have a definite answer as to how the SEC believes the law applies to their business.
Coinbase Leads Fight for Crypto Clarity
The lack of guidance has created further chaos within the crypto sector and Coinbase seems to be determined in leading the fight for clearer regulations that better reflect the dynamics of the cryptocurrency market. The petition was filed on the same day as nine tokens available on Coinbase were unregistered securities. Coinbase has also recently been fined $30million for its staking-as-a service program and the SEC may also introduce regulatory pressure due to its staking products.
SEC’s Response: Will Coinbase Lead Crypto Regulations?
The crypto market continues to evolve at a rapid pace and the SEC needs to catch up or Coinbase may just take the lead in setting the standards for crypto regulations. If the SEC fails to act, Coinbase’s upcoming earnings on May 4 might come under further pressure as the lack of clarity within the market takes its toll.
Coinbase hopes that the SEC’s response to their petition will provide much needed assurance to the sector and help propel the cryptocurrency industry in the right direction. We will have to wait and see if the SEC will choose to act or if Coinbase’s legal challenge will completely change the landscape of the crypto regulations in the US.
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