SEC Rejects Coinbase's Call for Crypto Regulations as 'Unwarranted'

• SEC Rejects Coinbase's Request for Tailored Regulations for Digital Assets
• Gensler's Arguments
• Coinbase's Attempt at Formal Pressure
• SEC's Response
• Workable Compliance Method

SEC Rejects Coinbase's Request for Tailored Regulations for Digital Assets

The petition from U.S. crypto exchange Coinbase to the Securities and Exchange Commission (SEC) for a system of customized rules for digital assets was turned down by the regulatory body on Friday. Gary Gensler, Chair of the SEC, stated in conjunction with the denial, The existing securities regime adequately governs crypto asset securities.

Gensler's Arguments

Gensler contended that current legislation provides the SEC with enough authority over the sector. He also highlighted that the regulatory body has been developing rule proposals to directly supervise crypto enterprises. Furthermore, Gensler pointed out that their enforcement division has effectively intervened to address malpractices.

Gensler made a separate point, emphasizing, It is important to maintain commission discretion in setting its own rulemaking priorities.

Coinbase's Attempt at Formal Pressure

Coinbase initiated this formal pressure in 2022, before it was subsequently sued by the SEC for operating as an unregistered securities exchange. The company sought a mandatory response from the federal court earlier this year, which has just been received.

SEC's Response

The commission disagrees with the petition's argument that application of existing securities laws and regulations to crypto asset securities, issuers of those securities, and intermediaries in the trading, settlement, and custody of those securities is impractical, was the conclusion of the five-member commission in its two-page response. The agency assured that the request had been thoroughly examined and concluded that the requested rulemaking is currently unnecessary, hence the denial of the petition.

Workable Compliance Method

While not expressly naming Prometheum Inc., Gensler indicated that a crypto broker has employed a unique digital assets registration, implying that this route of compliance is workable.

Edited by Jonathan Stoker