Coinbase vs. SEC: Crypto Exchanges Demand Clear Rules in Fierce Appeal

Bittime - The battle between cryptocurrency companies and the SEC (Securities and Exchange Commission) for clear regulation in the digital asset space continues. In a last-ditch effort for rulemaking, Coinbase filed a 36-page closing document in the Court of Appeals for the Third Circuit.

The document urges the court to order the SEC to begin writing regulations specifically for cryptocurrencies.

A “Catch-22” for Crypto Companies?

Coinbase argues that the SEC has put crypto companies in an impossible situation. The agency expects companies to comply with regulations, but declined to prescribe such regulations for digital assets. Additionally, the SEC has launched enforcement actions against companies deemed non-compliant, creating a frustrating “Catch-22” scenario.

"The SEC's actions demonstrate a deliberate effort to cripple the crypto industry by demanding the impossible and then punishing companies that cannot meet those unspecified expectations," Coinbase said in its closing documents. They further emphasized the need for major policy changes from the SEC regarding digital assets.

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SEC Rejects Call for Rulemaking

Earlier in May, the SEC denied Coinbase's petition for rulemaking, claiming the exchange could not force them to write new regulations. The agency argued that existing regulations were sufficient for digital assets, a position disputed by Coinbase.

Coinbase claims the SEC's stance on crypto regulation is inconsistent. "The SEC insists their position has not changed, but that is simply not true," they said in the document. The exchange argued that the SEC's current approach relies on vague interpretations of existing regulations, thereby preventing clear guidance for the industry.

Years of Arguing

Coinbase first petitioned the SEC for formal rulemaking in July 2022, seeking clear guidance for the crypto industry.

While the SEC has not introduced specific crypto regulations, it has proposed rules that apply to crypto in other areas, such as requiring qualified custodianship of crypto holdings by registered investment advisors. Coinbase views these existing regulations as an “ill-fit” solution for the unique nature of digital assets.

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Law Enforcement Actions Cause Controversy

The SEC has also taken an aggressive approach through enforcement actions against crypto platforms and projects in the past year. Notably, the SEC sued Coinbase in June 2023 for operating their platform without proper registration. 

This approach, often referred to as “regulation through enforcement”, has drawn criticism from the crypto industry which advocates a more transparent and collaborative approach.

Coinbase Sues for Clarity

Seeking a definitive answer, Coinbase sued the SEC in April 2023 to force them to officially accept or deny their rulemaking petition. However, the SEC rejected the request with Chairman Gensler stating that existing regulations apply to crypto. 

Gensler also mentioned resource allocation as an issue, implying that the crypto market is not a top priority for the SEC compared to other capital markets.

The SEC has not yet commented on Coinbase's latest appeal. This ongoing battle highlights the growing tension between the crypto industry and regulators seeking to control this rapidly growing market.

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How to Buy Crypto on Bittime

You can buy and sell crypto assets in an easy and safe way via  Bittime .  Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.

Monitor price chart movements  of Bitcoin (BTC) ,  Ethereum (ETH) ,  Solana (SOL)  and other cryptos to find out today's crypto market trends in real-time on Bittime.

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DISCLAIMER:  This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.