Prominent crypto exchange Coinbase recently hit back at the U.S. Securities and Exchange Commission [SEC] by submitting a petition requesting clarification on crypto regulations. However, Coinbase disclosed that the response received from the regulators was not favorable to the cryptocurrency industry.
According to recent court documents, the SEC suggested that it is under no obligation to deliver Coinbase’s requests presented in the petition. The SEC also contended that Coinbase’s proposal for comprehensive reforms and rule-making within a constrained timeframe is a complex task. The SEC stated in its filling,
“Neither the securities laws nor the Administrative Procedure Act impose on the Securities and Exchange Commission an obligation to issue the broad new regulations regarding ‘digital assets’ Coinbase has requested.”
Paul Grewal, Coinbase’s chief legal officer, expressed his thoughts on Twitter. He explained that the SEC could take several years to provide the cryptocurrency industry with regulatory clarity. Grewal expressed clear disappointment with the SEC’s response, referring to it as a “resounding maybe.” However, he acknowledged that this filing marked the first instance where the SEC formally articulated its position on how it plans to develop regulations for the cryptocurrency industry. Elaborating on the way forward, Grewal said,
“The SEC acknowledged that it will continue to use enforcement actions as a substitute for rulemaking for the foreseeable future, but not to worry — those enforcement actions may eventually “inform” not-yet-planned rulemaking.”
SEC distances itself from Gary Gensler’s statements and perspectives
Grewal reiterated that the SEC seemed to be separating itself from the statements and perspectives expressed by its chair, Gary Gensler. Gensler has consistently emphasized the presence of adequate regulations. Additionally, he has advocated for categorizing a significant portion of the cryptocurrency market as securities. He added,
“The SEC also said that the public statements by Chair Gensler are not formal guidance or policy statements from the SEC and the public cannot rely on them as such.”
Coinbase called out
The SEC took shots at Coinbase as well. The filing further read,
“As Coinbase’s own submissions make clear, considering the various paths it suggests is a necessarily complicated endeavor. Yet Coinbase filed its rulemaking petition fewer than ten months ago, supplemented aspects of the petition fewer than three months ago, and sought to supplement the record again only weeks ago.”
While Coinbase’s intention of seeking clarity regarding the ambiguous regulatory treatment of crypto in the U.S. seems to have encountered more confusion, Grewal addressed the same.
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