US SEC Denies Coinbase’s Plea for Revised Digital Asset Regulations, Review Petition Underway
In Brief
U.S. SEC denied Coinbase Global’s request for the establishment of new regulations governing the digital asset sector.
In a recent development, the U.S. Securities and Exchange Commission (SEC) rebuffed a request by Coinbase Global, for the establishment of new regulations governing the digital asset sector.
The SEC, comprised of a five-member commission, voted 3-2 against proposing fresh rules, dismissing Coinbase’s contention that existing regulations are impractical for the crypto industry.
In response to the SEC’s decision, Coinbase swiftly announced its intention to challenge the ruling in court, filing a petition for review. This latest clash underscores an ongoing power struggle between the cryptocurrency sector and the top regulatory authority in U.S. financial markets.
The SEC, known for categorizing most crypto tokens as securities within its jurisdiction, has previously initiated legal action against numerous crypto companies, including Coinbase, alleging the improper listing and trading of tokens that it asserts should be registered as securities.
SEC Chair Gary Gensler defended the decision, stating, “Existing laws and regulations apply to the crypto securities markets.” However, Coinbase’s Chief Legal Officer, Paul Grewal, countered this, stating, “No one looking fairly at our industry thinks the law is clear or that there isn’t more work to do,” emphasizing the need for collaborative efforts to establish laws and regulations that benefit consumers and promote U.S. innovation.
Shortly after the SEC’s decision, Coinbase informed a federal court of appeals in Philadelphia of its intention to seek a review, asserting that the denial was “arbitrary and capricious” and an “abuse of discretion.” This legal maneuver is the latest chapter in Coinbase’s 2022 initiative to urge the SEC to create a tailored set of rules for the crypto sector, citing inadequacies in existing U.S. securities laws.
In April, Coinbase sought judicial intervention to compel the SEC to respond to its petition, a move the court refrained from enforcing, given the SEC’s commitment to address Coinbase’s concerns.
Cryptocurrency firms have consistently advocated for greater clarity on when the SEC deems a digital asset to be a security.
Coinbase’s Recent Challenges in Kazakhstan
Last month, Kazakhstan’s Ministry of Culture and Information officially confirmed the blocking of Coinbase’s website within its jurisdiction, pointing to alleged violations of the national Digital Assets Law. The move ignited conversations surrounding the regulatory landscape for cryptocurrencies and digital exchanges in the country.
The Ministry’s Information Committee took action in response to a request from the Ministry of Digital Development, Innovation, and Aerospace Industry.
The latter contended that Coinbase’s operations ran afoul of specific provisions of the law, particularly those prohibiting the engagement in unsecured digital assets and cryptocurrency exchange activities without proper state authorization.
While Coinbase is the latest entity to grapple with regulatory restrictions, it is not alone in facing such challenges.
Interactive Brokers and the New York Mercantile Exchange (NYMEX) also encountered temporary blockages, amid accusations of involvement in financial pyramid schemes and offering cryptocurrency futures trading beyond the scope of the Astana International Financial Center (AIFC).
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
