Coinbase and SEC: Conflict at the Frontier of the Cryptocurrency Industry
Date: 2024-06-03 Author: Gabriel Deangelo Categories: BUSINESS
Cryptocurrency exchange Coinbase has entered into a legal battle with the US Securities and Exchange Commission (SEC), accusing the regulator of intending to undermine the cryptocurrency industry. In a 36-page report filed with the appeals court, Coinbase expressed serious complaints about the SEC's policies and outlined its point of view on the current situation.
Coinbase Charges: Catch 22
Coinbase claims that crypto companies have fallen victim to a so-called “catch 22” - a situation in which compliance with one rule automatically leads to violation of another. The SEC, according to exchange lawyers, is deliberately creating such legal conditions to make it difficult for cryptocurrency firms to operate and then file lawsuits against them. This creates insurmountable barriers for the industry, Coinbase claims.
Refusal of Dialogue and Creation of Rules
One of the key accusations from Coinbase is the SEC's reluctance to develop clear rules for the cryptocurrency market. The regulator refuses to come to the negotiating table, leading to ongoing litigation and uncertainty for crypto firms. The SEC's pattern of behavior is a deliberate attempt to destroy the industry, the report said.
Examples of Engagement and SEC Position
The Coinbase report provides examples of the SEC's biased attitude towards crypto participants. The document also mentions statements by some members of the Commission who believe that the regulator is hindering the development of the digital asset industry. For example, SEC representative Hester Pierce spoke about the creation of a cross-border sandbox for blockchain companies from the US and UK, allowing them to experiment with tokenized securities.
Attempts to Soften the Policy
The SEC argues that the new approach to regulating crypto assets may only create problems for a small percentage of market participants. However, Coinbase expresses doubts about such statements, noting that the regulator does not demonstrate a readiness for real changes.
Legal Proceedings
The conflict between Coinbase and the SEC escalated in June 2023 when the SEC filed a lawsuit against the exchange, accusing it of operating without a license. Coinbase tried to have the regulator's claims rejected, but was rejected by the court. This case was just one of many examples of the tense relationship between the crypto industry and regulators.
The conflict between Coinbase and the SEC highlights the complexity and ambiguity of regulating the cryptocurrency industry. The lack of clear rules and dialogue creates serious barriers to the development of the digital asset market. However, efforts by some SEC members to soften their regulatory approach and initiatives such as the cross-border sandbox offer hope for possible positive changes in the future.
