Coinbase Takes SEC to Court for Regulatory Clarity

Crypto exchange Coinbase seeks clearer regulations from the Securities and Exchange Commission (SEC) over its digital assets securities. After sending the SEC its petition for rulemaking last July, Coinbase asked the regulator to propose and take on new rules for crypto asset securities to provide clarity and certainty on regulatory treatment. Following nine months with no response from the SEC, Coinbase has taken the matter to the courts to challenge the response-delay. The law dictates that the SEC must address Coinbase’s petition within a reasonable amount of time. Should the SEC’s eventual response not generate any new regulatory rules, the crypto exchange has the right to bring the case to court, initiated by tilting for regulatory clarity. The SEC recently claimed that nine tokens offered by Coinbase were unregistered securities.

Coinbase seeks to compel SEC to respond
Cryptocurrency exchange Coinbase has taken action against the Securities and Exchange Commission (SEC) in a federal court where it seeks clearer crypto regulations. Coinbase wanted the regulator to create new rules for digital assets securities precisely so that clarity and certainty needed to be provided for regulatory treatment. For U.S. capital markets to be healthy, crafting a regulatory path for digital asset securities is a necessity. However, following an understandable time lag after nine months with no response, Coinbase decided to challenge the regulator to unlock its “application for rulemaking” officially. Experts suggest that this course of action means the SEC will be taken to court unless there is a significant and prolonged improvement in its feedback.

Regulatory challenges for Coinbase reflect U.S. crackdown
Coinbase faces several challenges as regulations authority agencies have tightened the scrutiny of cryptocurrency and digital asset firms in the US. Several crypto exchanges, including Coinbase and Kraken, have reported the regulatory rules would impose uncertainty in the cryptocurrency markets, exert undue pressure on the benefit of digital assets trading, and dissuade investors. Coinbase’s clear objective is to find ways to survive ever-changing market conditions, so it has turned to offering other diversified products and services which present even more opportunities and risk to revenue. An adverse SEC verdict will require Coinbase to pivot its product offering or face tricky employment conditions. Alongside other cryptocurrency exchanges, Coinbase has navigated the pandemic era boom and the recent crypto winter. An uptick in prices amid retail traders returning to the exchange’s platforms might reassure hesitant crypto-prone investors how soon it could start.
[h/t André Beganski]