In an effort to persuade the U.S. Securities and Exchange Commission (SEC) to offer greater regulatory direction and clarity for the cryptocurrency business, Coinbase has filed a petition against the SEC in a federal court.
Coinbase is proactive in its approach.
By trading volume, Coinbase is the largest bitcoin (BTC) trading platform and cryptocurrency exchange in the United States. As a result, it has made the proactive decision to address the region’s lack of regulatory certainty.
Remember that the SEC under Gary Gensler sent Coinbase a Wells notice last month informing the exchange of an upcoming enforcement action against it owing to a suspected violation of its securities laws?
The Brian Armstrong-led exchange has filed a narrow action lawsuit against the agency in the most recent development. The exchange had previously stated that it would not hesitate to square up against the government in court rather than be coerced into pleading guilty to a crime it did not commit.
According to a blog post by Coinbase, the action aims to force the SEC to “respond yes or no” to a previous request from the company that the body “use its formal rulemaking process to provide guidance” for the web3 industry.
The SEC Limits Web3 Growth
The exchange stated that their July 2022 petition listed the essential issues the SEC must address in its rulemaking process, including identifying the precise cryptoassets that qualify as securities, identifying issuer registration, mandatory disclosures, exclusions, and exchange registration.
But instead of taking the necessary measures since then, the agency has resorted to taking enforcement actions against legitimate participants in the crypto market, all in the guise of regulating the sector.
“Coinbase filed further comments in December 2022 and March 2023, stressing the necessity for rulemaking and presenting more detailed recommendations. Additionally, Coinbase provided a number of prospective registration options for the SEC to take into account for any digital assets that are legitimately entitled to registration throughout the course of more than 30 meetings in the previous year. Nevertheless, more than nine months (and counting) after Coinbase initially filed its petition, the SEC has yet to act on it or offer any input. Instead, it has intensified efforts to pursue enforcement actions that regulate retroactively.
Coinbase has stated.
The Administrative Procedure Act (APA), according to Coinbase, requires the SEC to reply to its rulemaking petition in a timely manner.
The exchange pointed out that Coinbase will have the opportunity to argue against the SEC’s judgment in court and highlight the value of rulemaking.
The exchange also stressed the need for regulatory clarification in the US crypto market, as many market participants still do not know how SEC regulations affect their companies.
However, these organizations are continually under risk of agency legal enforcement.
With regard to these matters, Coinbase has promised to keep taking the appropriate actions to seek regulatory clarity and to make itself available for discussion with the SEC and other pertinent agencies.
In related news, Coinbase recently hinted that if the current regulatory concerns persist, it may abandon the United States and move its operations to other crypto-friendly countries.