Coinbase Challenges SEC for New Crypto Rules

Coinbase's Chief Legal Officer, Paul Grewal, expressed disappointment in the SEC's denial of the crypto exchange's request for updated digital asset regulations.

After a prolonged period of silence, Coinbase pursued legal action to prompt the necessary response, planning to challenge the SEC’s perceived neglect of duties in court.

The rift between Coinbase and the SEC began in 2022 when the exchange first sought revised regulations. Grewal highlighted dissent from SEC Commissioners Peirce and Uyeda, emphasizing the need for constructive dialogue between regulators and the crypto industry to create beneficial regulations and move away from legal confrontations driven by changing stances.

Coinbase filed a petition for review in the U.S. Court of Appeals for the Third Circuit to contest the legitimacy of the SEC’s dismissal of their rulemaking request. They stated that the SEC’s formal denial finally allowed for the judicial review that the agency’s prolonged inaction had obstructed.

While the SEC hasn’t introduced specific crypto-related regulations, it has proposed rulemakings applicable to the industry, including revisiting a custody rule for registered investment advisors handling crypto assets.

Additionally, the SEC has taken enforcement actions, including an ongoing case against Coinbase for allegedly operating as an unregistered exchange, which Coinbase has contested, seeking its dismissal.

SEC Chair Gary Gensler emphasized the agency’s responsibility in resource allocation, noting the relatively smaller scale of the crypto market compared to the broader capital markets under its oversight. Gensler stressed the importance of maintaining flexibility to prioritize regulatory focus where necessary within the capital markets.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.