- Coinbase wants the SEC to ensure clarity of the impact of current securities laws
- The regulator's approach doesn't provide adequate guidance for crypto firms
Coinbase has approached a federal court to force the US Securities and Exchange Commission (SEC) to respond to a petition the crypto exchange filed in 2022, requesting a formal decision within the digital assets sector, CoinDesk reported.
On April 24, Coinbase filed an Administrative Procedure Act against the regulator, requesting the Court of Appeals in the third circuit order the SEC to ensure legislative clarity of the impact of currently effective securities laws on digital assets.
SEC does not provide adequate regulatory guidance
The filing by the exchange is a preventative argument that the regulator’s approach doesn’t provide adequate monitoring guidance for businesses operating in the crypto sector. The filing states:
It is widely recognized – including by a sitting SEC Commissioner – that existing SEC registration and disclosure requirements are incompatible with digital assets, which differ fundamentally from the stocks, bonds, and investment contracts for which the securities laws were designed and that the SEC traditionally has regulated. The SEC at a minimum must set forth how those inapt and inapposite requirements are to be adapted to digital assets. But the SEC has refused to do even that.
Response to legal threats
The SEC warned the leading US crypto exchange that they would sue them, accusing them of listing and selling unregistered securities. As Bankless Times reported a month ago, the regulator sent the exchange a Wells notice to inform that its planned future course of action may include a cease and desist order or an injunction. However, it didn’t specify how Coinbase had violated the law.
The exchange has to respond to the specific allegations by the end of the month.
Unclear laws won’t stop the government
Despite the lack of regulatory clarity, the government agency is being quite active in making its presence felt across the digital asset sector. At the end of February, Bankless Times reported that crypto exchange Robinhood Markets had received an investigative subpoena from the SEC. It involved the platform’s operations, crypto custody, and cryptocurrency listings.
