Coinbase to Challenge SEC’s Denial of Request for New Digital Asset Regulation
Coinbase’s Chief Legal Officer, Paul Grewal, has announced that the crypto exchange will contest the Securities and Exchange Commission’s (SEC) decision to reject its request for new regulations regarding digital assets. The SEC called Coinbase’s request “unwarranted.” Grewal took to Twitter to express his disappointment, stating that after 18 months of silence from the SEC, Coinbase went to court to receive a response as required by law. He also mentioned that they would seek help from the Third Circuit to challenge the SEC’s failure to fulfill its duty.
Grewal highlighted the disagreement between Republican SEC Commissioners Hester Peirce and Mark Uyeda and the denial of Coinbase’s request, emphasizing the need for dialogue between regulators and the crypto industry. He stated that working together to create beneficial laws and rules should be prioritized over defending lawsuits based on ever-changing legal positions.
SEC’s Actions
The SEC has not proposed specific regulations for cryptocurrencies but has introduced rulemakings over the past year that could apply to the industry. For instance, they reopened a custody rule requiring registered investment advisors to store crypto with a qualified custodian and comply with certain requirements. The SEC has also taken enforcement actions against Coinbase for operating as an unregistered exchange.
SEC Chair Gary Gensler emphasized that the crypto market is relatively small compared to other capital markets overseen by the agency. He stated that while fraud, abuse, and noncompliance are more prevalent in the crypto market, it is crucial for the Commission to have discretion in directing resources towards updating regulations in all parts of the capital markets.
Hot Take: Coinbase Fights Back Against SEC’s Denial
Coinbase is not backing down after the SEC denied its request for new digital asset regulations. The crypto exchange plans to challenge this decision, asserting that the SEC’s denial is unwarranted and goes against the need for collaboration between regulators and the industry. Coinbase’s Chief Legal Officer, Paul Grewal, expressed disappointment in the SEC’s lack of response for 18 months and emphasized the importance of working together to create beneficial laws. As the legal battle continues, it remains to be seen how this clash between Coinbase and the SEC will shape the future of crypto regulation in the United States.
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