Coinbase Files Petition to Force SEC to Create a Clear Framework for Digital Asset
Coinbase, one of the world’s largest cryptocurrency exchanges, has filed a petition with the U.S. Court of Appeals for the Third Circuit, requesting the court to force the U.S. Securities and Exchange Commission (SEC) to create a clear framework for digital assets. The petition was filed after the agency failed to respond to Coinbase’s petition for rulemaking last year.
The rulemaking petition submitted by Coinbase last year urged the SEC to clarify how securities laws apply to cryptocurrencies and create a new legal framework for the crypto market. The lack of a clear framework has been a persistent issue for the crypto industry, with many crypto firms struggling to comply with existing regulations.
Coinbase’s latest legal action comes after the SEC served the exchange with a notice of further action over a potential violation of securities laws through its exchange and staking services. Coinbase’s chief legal officer, Paul Grewal, welcomed the legal process, saying that it would help clarify the issue and prove that the SEC is not fair and reasonable when it comes to digital assets.
Coinbase CEO Brian Armstrong recently stated that the company could move its headquarters outside the U.S. if the regulatory environment does not change in the country. The move would be a significant blow to the U.S., which has been struggling to keep pace with other countries in the race to attract crypto-related businesses.
The SEC’s Chair Gary Gensler has been known for his strict regulatory approach toward crypto assets over the years. He has reiterated his belief that all crypto assets, other than Bitcoin (BTC), are securities several times. Gensler has also repeatedly stated that existing rules are clear, and crypto firms just reject complying with them, so there is no need for new crypto-specific regulations.
Over the last several months, many crypto exchanges, including Coinbase, Kraken, Bittrex, and Binance, have come under increased scrutiny by the SEC. The lack of a clear regulatory framework has made it difficult for these exchanges to operate without fear of potential legal action. The petition filed by Coinbase is an attempt to force the SEC to create a clear regulatory framework that will benefit both the crypto industry and the agency.
