Coinbase Contests SEC Powers to Regulate Cryptocurrency Exchanges
Main Breakdown:
– Coinbase, the largest U.S.-based cryptocurrency exchange, filed an answer to the SEC’s complaint accusing them of unregistered securities brokerage.
– In their filing, Coinbase argues that the SEC’s recent enforcement action contradicts their prior approval of the exchange’s business model.
– Coinbase criticizes the SEC’s newfound position, saying that no statute enacted since April 2021 gives the SEC the power to regulate digital asset exchanges.
– The filing also highlights the changing views of SEC Chair Gary Gensler on the SEC’s authority in the cryptocurrency space.
– Coinbase concludes that even if the SEC’s changes regarding securities were valid, the major questions doctrine would require courts to reject this construction.
Gensler vs. Gensler
Hot Take:
Coinbase’s filing challenges the SEC’s authority to regulate cryptocurrency exchanges and highlights the changing positions of SEC Chair Gary Gensler. The document argues that the SEC’s enforcement action contradicts their prior approval and offends due process. Coinbase maintains that the SEC lacks the power to regulate digital asset exchanges and that the major questions doctrine would require courts to reject the SEC’s construction. This case has significant implications for the regulation of the cryptocurrency industry and the authority of regulatory agencies.
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