SEC pushes back against Coinbase’s call for clear crypto regulations, leaving the exchange in limbo regarding the SEC’s intentions in the ongoing legal battle.
SEC Cites Unreasonable Demands in Court Filing
The SEC stated in a court filing on Monday that it is not required to meet the standards outlined by Coinbase in the petition and that the company is asking for an unreasonable quantity of difficult changes and rule-making in a short period.
One of the largest cryptocurrency exchanges in the United States, Coinbase, had filed a complaint with a Philadelphia federal appeals court, alleging that the SEC had refused to consider their rule-making petition and was instead going to conduct enforcement measures against the company for listing unregistered securities.
To get public feedback on how securities regulations should be applied to the regulation of cryptocurrencies, Coinbase petitioned the SEC to create a notice-and-comment process last year. The SEC has stated in a filing that it does not have a set deadline for completing such work, but that it believes regulatory changes necessitate a thorough assessment.
Staking services, in which users lock their cryptocurrency assets for a period of time to support blockchain operations in exchange for incentives, are another area in which Coinbase has requested clarification from the SEC. However, the SEC’s statement did not shed light on the situation as was desired.
SEC Shares Views on Cryptocurrency Regulations
In an unprecedented move, the Securities and Exchange Commission (SEC) has engaged in discussions regarding judicial opinions, marking a notable milestone for the regulatory body. Paul Grewal, the Chief Legal Officer of Coinbase, acknowledged that this court appearance marked the first time the SEC explicitly presented its stance on whether and how it should implement laws pertaining to the cryptocurrency industry.
During the proceedings, the SEC made it clear that the process of rulemaking could potentially span several years, indicating a lack of urgency in establishing a regulatory framework. Instead, the agency expressed its intention to rely on enforcement actions as a means of regulating the industry, rather than issuing comprehensive guidelines.
Responding to the notice, Brian Armstrong, the CEO of Coinbase, expressed concerns over what he described as questionable conduct by the government agency. He voiced his frustration, suggesting that the lack of clear communication and transparency from regulators constituted “sketchy behavior.”
SEC’s participation in a court discussion regarding cryptocurrency regulations marks a significant development in the regulatory landscape. As the industry evolves, the outcome of these deliberations will have far-reaching implications for both market participants and regulatory authorities.
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