According to the cryptocurrency exchange Coinbase, the United States Securities and Exchange Commission (SEC) will continue its enforcement-based regulatory approach towards the crypto industry as long as it meets its objectives. In its appeal to the U.S. Court of Appeals on May 31, Coinbase urged the court to compel the SEC to establish fair rules for the crypto industry, stating that the SEC is serious about eliminating crypto assets.
Coinbase Team Takes Notable Step
In the ongoing process, the exchange argues that the agency does not seem willing to sit down and create clear and fair rules, stating:
“Giving the agency more opportunities to explain itself is both meaningless and absolutely undeserved.”
Coinbase claims that the SEC has no duty to enable compliance with its own rules and believes the rules are sufficiently enforceable, as it has already taken legal action against many firms in the industry for violating them.
The exchange also urged the court not to rely solely on the SEC’s word before reiterating the stance of other SEC Commission members who believe the agency is hindering the crypto asset industry and welcoming the demise of new technology. Hester Pierce, a pro-crypto SEC commission member, recently published a letter introducing a cross-border sandbox program experimenting with tokenized securities among blockchain firms in the U.S. and the U.K.
Coinbase and SEC
Meanwhile, Coinbase claimed that the SEC’s rules might only pose challenges for a small segment of the industry, suggesting it is attempting to soften its harsh approach towards the crypto industry:
“The SEC is trying to minimize its oppressive stance by suggesting only a small group of market participants might face compliance difficulties under the current rules.”
SEC initiated the lawsuit against Coinbase in June 2023, alleging that Coinbase never registered as a broker, national securities exchange, or clearing agency and avoided disclosure plans for securities markets. Coinbase sought the dismissal of the case, but the SEC consistently opposed these efforts. Despite optimism from the crypto sector and legal experts about Coinbase’s chances of dismissing the case, the lawsuit was not successful.
