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HomeCryptoCoinbase accuses the SEC of trying to destroy the crypto industry

Coinbase accuses the SEC of trying to destroy the crypto industry

Coinbase argued that the appeals court should order the U.S. Securities and Exchange Commission (SEC) to start writing regulations for cryptocurrencies. The exchange argues in its last-ditch push towards regulation.

Cryptocurrency companies are caught in a “Catch-22,” Coinbase said in the release summary The 36-page document was filed Friday in the Court of Appeals. The exchange noted that the SEC has required companies to comply while also conducting “litigation against those companies” and has refused to write regulations.

“This behavior is a targeted attempt to destroy an industry, by demanding unreasonable things and prosecuting companies that do not comply.”

Coinbase added that the agency is trying to make major policy changes.

“The SEC stated that its stance on digital assets has never changed. But that’s not true. The SEC has made abstract statements that the application of securities laws to digital assets is based on the facts and circumstances.”

Earlier this month, the SEC rejected Coinbase’s call for regulation and said the exchange cannot force the regulator to write new rules. The agency argues that current digital asset regulation is “unworkable.”

Demand regulatory clarity

For years, Coinbase and the SEC have debated the need for regulation.

Coinbase first asked the SEC to issue a formal rulemaking process to “provide guidance to the cryptocurrency industry” in July 2022.

While the SEC has not yet released regulations specifically for the crypto space, it has proposed rules over the past year that apply to cryptocurrencies. For example, the SEC reviewed its custodial regulations, mandating that investment advisors registered to store cryptocurrencies with a qualified custodian comply with specific requirements.

On Friday, Coinbase disputed the matter and said the SEC regulations were “inappropriate.”

The SEC has also brought enforcement actions against crypto platforms and projects over the past year. The agency sued Coinbase in a separate lawsuit in June for operating the platform without registration. Meanwhile, the cryptocurrency industry has criticized the SEC for its approach to regulation “through enforcement.”

SEC Chairman Gary Gensler argued that most cryptocurrencies are securities and should be regulated similarly to other investments.

Coinbase attempted to force the agency to take a clear stance with its rulemaking petition and lawsuit against the SEC in April 2023.

The SEC later denied the request to establish new regulations and Chairman Gensler said that existing regulations already apply to the cryptocurrency sector.

Gensler also said at the time that a key part of the SEC’s responsibility is figuring out how to divide resources. He emphasized that the cryptocurrency market is quite small compared to the rest of the capital markets that the agency oversees.

The SEC currently declines to make any further comments on this matter.

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Viet Cuong

According to The Block

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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