SEC rejects Coinbase's petition for new cryptocurrency regulatory framework

In a new filing on Friday, the U.S. Securities and Exchange Commission (SEC) urged a court to dismiss Coinbase’s petition for a new regulatory framework for cryptocurrencies. The SEC rejected Coinbase’s arguments, insisting that its approach of applying existing regulations to cryptocurrencies is reasonable and within its discretion.

Exclusive news points:

• Coinbase's claim: In a March filing, Coinbase argued that the SEC has no authority to extend existing securities regulations to crypto assets and accused the agency of overreach and unauthorized enforcement. Coinbase's Paul Grewal called the current registration process unworkable.

• Ongoing conflict: The SEC sued Coinbase in June 2023, alleging that it operated as an unregistered exchange, clearinghouse, and broker and offered unregistered securities through its staking service. Coinbase has denied these claims, arguing that the tokens on its platform are not securities.

• Political Movements: Coinbase has been active in opposing the SEC’s “enforcement regulation” approach, calling for new legislation and making large donations to political candidates who support cryptocurrency.

• Current Status: The case is still ongoing. A federal judge recently allowed the SEC to proceed with its lawsuit, finding that its arguments against Coinbase were reasonable.

The author's opinion:

The ongoing dispute between Coinbase and the SEC follows several other Wells notices filed against crypto businesses by companies like Uniswap, Metamask, and Robinhood. As the election approaches, we can expect this fight to continue to heat up, and even the SEC’s role to come under further scrutiny.