In Its Final Push for Rulemaking, Coinbase Alleges Appeals Court to Compel SEC to Draft Crypto Regulations
Crypto News– Coinbase, in a 36-page closing brief filed on Friday in the Court of Appeals for the Third Circuit, argues that an appeals court should mandate the U.S. Securities and Exchange Commission to initiate the drafting of rules for the cryptocurrency industry.
Describing crypto firms as being ensnared in a ‘Catch-22,’ Coinbase highlights the SEC’s stance of demanding compliance while simultaneously engaging in aggressive litigation against firms failing to comply. Coinbase accuses the SEC of refusing to establish clear rules, leading to what it characterizes as a deliberate attempt to dismantle the industry.
The brief states, ‘This pattern of conduct is a purposeful effort to destroy an industry by demanding the impossible and prosecuting companies that fail to achieve it.’
Earlier this month, the SEC countered Coinbase’s plea for rulemaking, asserting that the exchange lacks the authority to compel the drafting of new regulations. The agency contends that branding existing digital asset regulation as unworkable’ is unreasonable.
Years of Seeking Regulatory Transparency
For years, Coinbase and the SEC have been engaged in a dispute regarding the necessity of establishing regulatory frameworks. Coinbase initially urged the SEC to initiate a formal rulemaking process aimed at offering guidance for the crypto industry back in July 2022.
Despite the absence of specific regulations tailored to cryptocurrencies, the SEC has put forth proposed rules over the past year that have implications for the crypto sector. For example, the SEC revisited a custody rule, stipulating that registered investment advisors must store crypto assets with a qualified custodian meeting certain criteria. However, Coinbase contested these regulations on Friday, arguing that they are inadequate for the complexities of the crypto landscape.
FAQs
Why does Coinbase believe the SEC is trying to undermine the crypto industry?
Coinbase argues that the SEC’s failure to establish clear regulations while simultaneously engaging in aggressive litigation against crypto firms creates uncertainty and hinders industry growth.
What action does Coinbase urge the SEC to take in response to its allegations?
Coinbase urges the SEC to establish regulations for the crypto industry to provide clarity and guidance to market participants.
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