The US Securities and Exchange Commission (SEC) has been urged by Coinbase to provide clarification on how securities laws apply to cryptocurrencies, but it seems the SEC could take a few more months before responding to this petition. This comes after a recent court filing in which the SEC responded to Coinbase’s request for rulemaking, prompting discussions on the need for clear guidelines in the fast-growing crypto industry.
Coinbase, one of the largest and most popular crypto exchanges, demanded a response from the SEC within seven days by issuing a writ of mandamus. However, the SEC dismissed this demand and anticipated that they could make a recommendation to the commission in the next four months. This timeline has left crypto enthusiasts on edge as regulatory clarity remains a vital component in the industry’s growth.
It’s no secret that the SEC has been critical of Coinbase recently, even suing the exchange for not being registered as an exchange, broker, or clearing agency last month. Despite this, the SEC notes that its lawsuit does not indicate whether the commission has decided to deny Coinbase’s rulemaking petition. But this leaves the question, is the SEC open to new rules for crypto?
On one hand, SEC Chair Gary Gensler has repeatedly urged crypto exchanges to register and emphasized that existing rules already govern the crypto industry. In addition, the SEC’s rulemaking agenda for spring 2023 doesn’t distinctly include plans for new crypto rules, but there are indeed proposals that could partially affect cryptocurrencies. This makes it seem like the SEC already has a framework in place for crypto and isn’t eager to create new rules.
On the other hand, Coinbase Chief Legal Officer Paul Grewal called out the SEC for allegedly ignoring statements made by the chair that confirm the lack of intention to issue new rules. Grewal argued that the SEC shouldn’t conflate the evidence of a decision with the statements themselves. Consequently, this could indicate that the SEC might be open to new rules, but no concrete plans are in place yet.
Overall, the standoff between the SEC and Coinbase showcases the need for a clear regulatory framework in the crypto industry. While the SEC argues that existing laws should be sufficient, Coinbase and other industry players insist that new and more specific rules are necessary to serve the digital asset market adequately. As the crypto ecosystem continues to rapidly develop, the community and regulators must strike a balance in ensuring fair regulations that foster innovation and safety for all stakeholders.
Source: Cryptonews
