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- 1 Coinbase filed a motion against the SEC in the U.S. Circuit Court.
- 2 The crypto exchange sought legal interference seeking regulatory clarity from the crypto exchange.
Leading US crypto exchange Coinbase and the US SEC are to face each other after the former filing a legal action against the latter. The crypto firm is seeking answers from the regulator on its July 2022 petition. Coinbase asked the SEC in the petition for the clarity on crypto regulations and if the rule-making could extend to the crypto industry as well. Since the commission did not respond to any the petition, the crypto firm took the legal way to get the clarification, asking the court to interfere.
Reuters report suggests that Coinbase’s petition from last year asked the Securities and Exchange Commision to “propose and adopt rules” which could regulate the digital traded securities. Inferring to have the clarity on which digital asset to be considered as a security and also create a crypto compatible market structure framework.
Though there are no clear regulations on cryptocurrencies within the US, the crypto firms have been facing enforcement actions from the regulator. Coinbase tried to seek clarification on regulations, but did not receive any response, but the SEC had tightened the scrutiny and the regulatory actions only ramped up since then.
From Bittrex to Gemini to Kraken to Paxos, many prominent crypto firms had witnessed a tussle from the securities regulator. Coinbase, despite voluntarily asking for clarity and guidance on the regulations, had faced warnings of potential regulatory actions.
Coinbase chief legal officer, Paul Grewal shared the blog post on Twitter on Tuesday, April 25. He noted the “narrow action in the U.S. Circuit Court” will make the agency acknowledge the petition and respond.
Grewal noted in the blog post, “From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet. So the action Coinbase filed today simply asks the court to ask the SEC to share its decision.”
The unclear crypto regulations create industry-wide skepticism and many crypto executives believe it to hinder the growth of the burgeoning asset class. Coinbase also reported to be the target of similar treatment.
In March this year, Coinbase reported to disclose that several staff members from the SEC recommended enforcement action against the exchange firm. However, the firm has cleared the intentions to fight any regulatory action in the court.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
