SEC Dismisses Coinbase Accusation of Power Grab via Enforcements
In a recent filing, the US Securities and Exchange Commission (SEC) dismissed Coinbase’s demand for the regulator to develop crypto-specific rules. The filing by Gary Gensler-led SEC urged the court to dismiss a petition by crypto exchange Coinbase for it to create a new crypto-specific regulatory system.
In March, the SEC responded to the Brian Armstrong-led Coinbase claims, claiming the securities watchdog lacks statutory authority to extend the present regime to the crypto assets.
Coinbase submitted that the SEC was ploughing prior to securing congressional authorization and engaged in power-grab enforcement actions. Coinbase added that decisions that extend the existing securities laws should involve prospective rulemaking aligned to the crypto traits.
SEC Challenges Coinbase Argument, Alleging Power Grab
Attorneys representing the SEC rejected the argument by Coinbase that present regulations are unworkable, hence ground to develop a new framework from the ground up. The SEC’s filing on May Friday 10 informed the US Court of Appeals for the Third Circuit that the incremental approach to applying the present regulatory framework to the crypto asset securities is within its discretion and reasonable.
Coinbase chief legal executive Paul Grewal challenged SEC’s argument in a Twitter post, claiming the present registration is “workable” and amounts to a “fallacy. The executive expressed confidence that the court would affirm the Coinbase stance.
Coinbase Versus SEC Contest
Coinbase has had legal runs with the SEC since the Commission levelled charges in June last year. The Commission alleged that the crypto exchange noncomplied registering as an exchange, brokerage or clearing house.
Coinbase overlooked the obligation to register to continue offering services, including unregistered securities sales and staking.
Coinbase vowed to defend itself against the charges, indicating that the tokens listed hardly qualify as securities as outlined in the investment contracts.
Coinbase Deploys Public Statements and Support for Pro-crypto Candidates
Coinbase has vowed to pursue the aggressive campaign via court filings and public pronouncement in an effort to push against the regulation-by-enforcement approach deployed by the SEC. Coinbase is urging new legislation and rulemaking from the SEC to govern the crypto sector.
Coinbase has, in the recent court, crypto-friendly political candidates through a $21.5 million donation to the Fairshake super PAC. Grewal revealed in a tweet earlier in May that it identifies with the PAC, citing the litigation campaign by the SEC. Besides, it considers electing pro-crypto candidates will bring understanding to rulemaking.
Coinbase efforts have not slowed the SEC’s lawsuit, with the crypto exchange failing in its bid to halt the proceedings. A late March decision by the federal judge granted a green light indicating the Commission’s arguments against Coinbase are plausible, hence denying the motion to dismiss the case.
