(CTN News) – Coinbase Crypto Global’s petition for new rules in the digital asset sector has been denied by the US Securities and Exchange Commission (SEC).
The commission, consisting of five members, voted 3-2 against proposing new regulations, stating that they do not agree with Coinbase’s claim that current regulations are unworkable for the crypto industry.
In response, Coinbase has filed a petition for review of the SEC’s decision in court. This disagreement is part of an ongoing conflict between the crypto sector and the top US markets regulator, with the SEC asserting that most crypto tokens are securities and fall under its jurisdiction.
The Securities and Exchange Commission (SEC) has initiated legal proceedings against multiple cryptocurrency firms, such as Coinbase, due to their inclusion and exchange of tokens that the SEC deems should be officially registered as securities.
SEC Chair Gary Gensler supported the decision, stating that existing laws and regulations apply to the crypto securities markets. However, Coinbase disputes this assertion.
Chief legal officer Paul Grewal emphasized that the law surrounding our industry is far from clear and there is still much work to be done. Grewal stated that we must collaborate in order to establish laws and regulations that will benefit consumers and promote innovation in the United States.
Following this, Coinbase promptly informed a federal court of appeals in Philadelphia about its intention to seek a review of the SEC’s denial.
In a court filing shared on social media platform X, Coinbase argued that the SEC’s decision was arbitrary, capricious, and an abuse of discretion.
In 2022, Coinbase urged the SEC to develop a tailored set of rules specifically for the cryptocurrency sector, asserting that the existing US securities laws are insufficient. In April, Coinbase appealed to a judge to compel the SEC to address their petition.
The court declined to force the agency to take action since the SEC had already committed to responding to Coinbase’s petition.
Crypto firms have expressed the need for clearer guidelines from the SEC regarding the classification of digital assets as securities.
In response to Coinbase’s request for rulemaking, Gensler, in his statement on Friday, argued that Coinbase had acknowledged the SEC’s authority over the crypto sector, a claim that the crypto exchange has previously disputed.
Republican SEC Commissioners Hester Peirce and Mark Uyeda issued a joint statement expressing their disagreement with the decision.
They emphasized that addressing the challenges posed by new technologies and innovations is an essential responsibility of a responsible regulator.