The SEC has rejected an application for regulation filed by exchange Coinbase. In particular, the US financial regulator believes that existing laws and regulations also apply to crypto markets. Coinbase disputes this decision and is taking legal action against the SEC.
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SEC finally responds to Coinbase and…. it’s a NO
In the United States, the war between state regulators and crypto platforms is far from over. In its note published on December 15, the Security and Exchanges Commission (SEC) believes that the crypto industry does not need special regulation. The SEC thus responded to an exchange petition of Coinbase asking for a clarification on crypto regulations.
There were three reasons for this decision. Firstly, the US financial regulator believes that existing rules apply to the crypto sector. According to the SEC the crypto industry falls within the scope of investment contracts, which are regulated by securities laws.
There is nothing in the crypto securities markets that suggests that investors and issuers are any less deserving of the protection of our securities laws.
Security and Exchange Commission
Secondly, the SEC believes that it is already regulating the crypto sector through the rules it sets. This is the famous regulation by execution that the senator Cynthia Lummis recently denounced by defending Kraken against the SEC.
Finally, the SEC considers that the crypto sector is really not a priority. According to the US financial watchdog, the crypto industry represents only a small part of the $110 trillion capital markets.
Coinbase goes on the attack again
Not surprisingly, the response from SEC strongly displeased the exchange Coinbase. A few hours after the regulator’s note, the legal director of Coinbase, Paul Grewal announced the continuation of the legal battle against SEC. In the complaint filed with a U.S. court, Coinbase believes that the SEC is arbitrary and capricious. The exchange hopes that the court will force the SEC to provide clear regulation of the crypto sector.
For the moment, it’s difficult to predict whether the American courts will rule in Coinbase’s favor. However, the exchange’s initiative is to be welcomed, as the SEC is only yielding to judicial pressure. Indeed, the SEC had already refused to respond to Coinbase’s petition of July 21, 2022. It was in response to Coinbase’s judicial pressure that the SEC finally responded… Good luck to Coinbase in this new judicial duel, which will undoubtedly have an effect on the entire ecosystem.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.
