Coinbase has made a final push for regulation, urging an appeals court to force the U.S. Securities and Exchange Commission (SEC) to regulate cryptocurrencies.
Coinbase claims that while the SEC is demanding compliance from firms, it is also pursuing aggressive lawsuits against those who fail to meet its demands. The SEC accuses Coinbase of refusing to set rules, which it interprets as a deliberate attempt to fragment the industry by setting unattainable standards and prosecuting companies that fail to meet them.
Coinbase also claims that the SEC is trying to implement a significant policy change. The exchange disputes the SEC's claim that its stance on digital assets remains consistent, arguing that the agency's evidence is merely abstract statements suggesting that the application of securities laws to digital assets depends on the “facts and circumstances.”
Earlier this month, the SEC rejected Coinbase's rulemaking call, arguing that the exchange could not force itself to impose new rules. The institution stated that it is unreasonable to describe the current digital asset regulation as “unenforceable”.
The need for rulemaking has been a point of contention between Coinbase and the SEC for years. In July 2022, Coinbase first requested the SEC initiate a formal rulemaking process to provide guidance for the crypto industry. While the SEC has not introduced crypto-specific regulations, it did propose rules last year that also apply to cryptocurrencies. For example, the SEC revised a custody rule that required registered investment advisors to store cryptocurrencies in a qualified custodian that must comply with certain requirements.
*This is not investment advice.
