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- 1 Coinbase called for urgent action from the SEC concerning the draft of a transparent set of rules for the crypto industry.
- 2 The U.S. SEC sued Kraken for mixing user funds and operating business without regulatory approval.
- 3 SEC is making a “Hedge and delay” over the plea: Eugene Scalia lawyer Coinbase.
The leading cryptocurrency exchange, Coinbase, called for urgent action from the U.S. Securities and Exchange Commission (SEC) concerning the draft of a transparent set of rules for the crypto industry.
The recent response letter from the SEC indicated a status report by December 15, 2023, over Coinbase’s petition for framing a clear set of rules for crypto. The chief legal officer of Coinbase, Paul Grewal, submitted the filing referencing the recent SEC action over Kraken for breaching federal securities laws.
According to Coinbase’s legal representatives, the SEC’s handling of the Kraken case, in which the exchange was accused of mixing customer assets and failing to register correctly, shows the regulator’s unwillingness to provide regulatory clarity.
Eugene Scalia, the company’s lawyer, criticized the SEC’s approach, claiming that the recent enforcement action against Kraken demonstrates that the SEC does not need regulatory clarity, urging the court to reject this apparent lack of commitment.
Per the recently filed letter in the U.S. Court of Appeals for the Third Circuit, Coinbase’s legal team believes that only the court can order the SEC to structure a clear set of rules for the crypto industry instead of controlling it by enforcement.
Scalia states, “Only an order of the court will make the commission act on the matter,” arguing that a recent update to the court from the SEC has no valuable information about the process and promised to provide the following process report on December 15.
Scalia’s statement criticizes the approaches SEC is making to “Hedge and delay” over the plea. Coinbase is one of the first exchanges that pushed for a clear set of rules for the crypto industry.
Following Coinbase’s pushover crypto rules, several other exchanges participated and backed the exchange to question the SEC over the formation of rules.
Are Centralized Exchanges a Major Victim of the SEC?
The SEC has pursued exchanges that trade unregistered securities or engage in fraudulent activity, proving its dedication to investor protection and market integrity.
The SEC enforces rules on cryptocurrency exchanges operating in the U.S.including registration and anti-fraud measures.
Exchanges must make their way through a complicated maze of regulations to ensure they adhere to all requirements. This entails establishing strong Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols and giving investors accurate and transparent information.
To provide a thorough regulatory framework for cryptocurrencies, the SEC is working closely with other regulatory organizations, including the Financial Crimes Enforcement Network (FinCEN) and the Commodity Futures Trading Commission (CFTC).
Coordination amongst these organizations is necessary to address investor protection, market manipulation, and money laundering issues and establish a compelling strategy to regulate the cryptocurrency sector.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
