Coinbase Pushes for Clearer Crypto Regulation Amidst SEC Action on Kraken
Cryptocurrency exchange Coinbase is using the recent legal action taken by the US Securities and Exchange Commission (SEC) against Kraken to advocate for clearer regulations in the crypto industry. In a letter dated 22 November, Coinbase argues that only through the use of mandamus, a court order, will the SEC respond to Coinbase’s petition for regulation. The letter states that the SEC’s fear of a court ruling has led to further delays. Coinbase also cites the SEC’s enforcement action against Kraken as evidence of the commission’s lack of regulatory clarity. The push for regulation intensifies as the SEC nears a decision on a Bitcoin-related exchange-traded fund (ETF).
Coinbase CEO Brian Armstrong Supports Compliance with US Laws
Brian Armstrong, CEO of Coinbase, defends his company’s decision to comply with US money transmitter licensing laws. In response to reports of rival Binance’s legal involvement, Armstrong emphasizes the importance of compliance to ensure Coinbase’s longevity. He acknowledges that this approach has slowed growth but believes in the rule of law. Armstrong criticizes the lack of regulatory clarity in the US, which he believes drives users to unregulated exchanges like Binance. However, he predicts that resolving the legal case against Binance could lead to greater regulatory clarity.
New Charges Against Kraken by the SEC
The SEC has filed new charges against cryptocurrency exchange Kraken, alleging that its parent companies operated an unregistered exchange, broker, dealer, and clearing agency. The agency claims that Kraken commingled client funds with corporate funds, posing a significant risk for investors. The complaint indicates that several cryptocurrencies are considered securities. Gurbir S. Grewal, director of the SEC’s enforcement division, argues that Kraken prioritized raising money from investors over complying with securities laws, creating conflicts of interest. Kraken plans to defend its position and asserts that it does not list securities. The exchange believes that congressional action is necessary to address the lack of regulatory clarity in the US.
Hot Take: Coinbase Urges SEC to Act on Regulation
Coinbase’s use of the SEC’s action against Kraken highlights the need for clearer regulations in the cryptocurrency industry. By pushing for a court order, Coinbase aims to prompt the SEC into responding to its petition for regulation. The lack of regulatory clarity demonstrated by the SEC’s enforcement action against Kraken further strengthens Coinbase’s argument. As the SEC approaches a decision on a Bitcoin-related ETF, the importance of clear regulations becomes more significant. Coinbase CEO Brian Armstrong’s support for compliance with US laws echoes this sentiment. Resolving legal cases and achieving greater regulatory clarity could shape the future of the crypto industry.
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