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- Coinbase is getting ready to present a suggested regulatory framework to federal regulators
- The exchange was a founding member of the Crypto Rating Council, which was formed in 2019 with the goal of establishing a uniform understanding of how closely a cryptocurrency resembled security
- The committee assigned a number between 1 and 5 to each cryptocurrency, with 1 indicating something that is clearly not security (such as bitcoin) and 5 indicating anything that appears to be a security
Coinbase is getting ready to present a suggested regulatory framework to federal regulators. According to individuals familiar with the regulatory negotiations, the exchange aims to make this idea public in the coming days. The proposal’s details were not available at press time, but the business wants to fight over what should and should not be defined as security in the United States, among other things. The development follows Coinbase’s announcement that it will no longer provide a crypto loan product, which the Securities and Exchange Commission (SEC) warned would be in violation of securities regulations. Coinbase’s Chief Legal Officer Paul Grewal and CEO Brian Armstrong disclosed earlier this month that the SEC had given the exchange a Wells Notice, threatening to sue if its Lend product went live.
The SEC argued that Lend appeared to be in violation of securities laws based on two Supreme Court precedents, the Howey and Reves cases. While the Wells Notice was not made public, legal experts told that the agency may be comparing Lend to stocks or certificates of interest, which are securities that fall within the SEC’s jurisdiction. Coinbase has a long history of attempting to standardize how exchanges treat crypto listings and goods, at least inside the United States, by developing frameworks and tools. The exchange was a founding member of the Crypto Rating Council, which was formed in 2019 with the goal of establishing a uniform understanding of how closely a cryptocurrency resembled security.
The committee assigned a number between 1 and 5 to each cryptocurrency, with 1 indicating something that is clearly not security (such as bitcoin) and 5 indicating anything that appears to be a security (the CRC has not announced any cryptocurrencies that fit that description). Last year, the CRC released its strategy as well as a scorecard that projects may use for self-evaluation. Last year, Coinbase released an open-source technical foundation for cryptocurrency developers. Should Coinbase accept these cryptocurrencies on its platform, projects that embraced the framework may verify that their cryptocurrencies are compatible with the exchange’s technological back end for listing and trading.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
