Coinbase, one of the largest cryptocurrency exchanges in the United States, is growing impatient with the Securities and Exchange Commission’s (SEC) lack of clarity on crypto regulations. In recent weeks, the exchange has taken the unusual step of petitioning for the SEC to provide more transparent guidance on digital assets.
During recent testimony before Congress, Coinbase CEO Brian Armstrong criticized the SEC’s perceived reluctance to offer clear rules for cryptocurrencies, citing the increasing number of fraud incidents involving digital assets. Armstrong urged lawmakers to pressure the SEC to take decisive action, stating that the lack of regulatory clarity is causing confusion and uncertainty for financial institutions and investors.
The SEC has acknowledged the need for clearer crypto regulations but has so far failed to provide comprehensive guidelines. In July, the regulatory body issued a statement indicating that they believe that most cryptocurrencies are securities and should be regulated as such. However, the SEC has yet to provide any specific guidelines for determining which digital assets qualify as securities, leaving crypto companies unsure about how to proceed.
This lack of clarity has left Coinbase frustrated, prompting the company to take an uncommon step to compel the SEC to provide more definite guidance. Coinbase recently filed a freedom of information act (FOIA) request with the SEC, asking the regulatory body to release their internal documents regarding their approach to cryptocurrency regulation.
This request marks a rare maneuver by a cryptocurrency company, which has typically been defensive in their dealings with the SEC. Given the ambiguous regulatory environment, crypto companies have generally been hesitant to provoke the SEC into taking action against them. However, Coinbase’s request may signal a shift in the industry’s approach to regulation, with more companies attempting to push the SEC into taking a stance on cryptocurrencies.
Coinbase has made it clear that they believe that the regulatory uncertainty is hurting the industry, stating that “the lack of clarity from the SEC has left the industry in limbo.” The company’s FOIA request reflects their belief that the SEC’s internal documents could provide insight into how the regulatory body approaches cryptocurrency regulation, which could help companies like Coinbase navigate the uncertain regulatory environment.
However, the SEC has not taken kindly to Coinbase’s request. The regulatory body has indicated that Coinbase’s request is too broad and that they will not be able to comply. The SEC has also stated that they are already providing substantial public information on cryptocurrency regulation and that Coinbase’s FOIA request is unnecessary.
Despite the SEC’s objections, Coinbase is not giving up on their push for clearer regulations. The company has indicated that they will continue their efforts to compel the SEC to provide more transparent guidance, even if it means engaging in legal battles. In a recent blog post, Coinbase stated that “we will continue to fight for greater regulatory clarity.”
The lack of regulatory clarity around cryptocurrencies remains a significant challenge for the industry. While some countries, such as Malta, have taken a pro-crypto approach, others, like China and India, have taken a harsh stance on digital assets. Without clear regulations, cryptocurrency companies are unsure how to proceed, and investors are hesitant to embrace cryptocurrencies.
Coinbase’s actions signify the growing frustration within the industry regarding the SEC’s lack of clarity on cryptocurrencies. While it remains to be seen if the company’s FOIA request will be successful, it is clear that the industry is eager for more comprehensive guidelines from the SEC.
In conclusion, Coinbase’s decision to file a FOIA request with the SEC is a sign of growing frustration within the cryptocurrency industry regarding the lack of regulatory clarity. While the SEC has acknowledged the need for clearer regulations, they have yet to provide comprehensive guidelines for digital assets. Coinbase believes that the SEC’s internal documents could provide insight into their approach to regulation, which would be helpful for companies looking to navigate the uncertain regulatory environment. Despite the SEC’s objections, Coinbase is committed to pushing for more transparent guidance on cryptocurrencies.
Cryptocurrency exchange Coinbase has filed a new appellate petition hoping to force the U.S. Securities and Exchange Commission (SEC) to provide the cryptocurrency industry with clear regulations. Coinbase is asking the 3rd U.S. Circuit Court of Appeals to require the SEC to respond to its July 2022 petition imploring the agency to “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods.” The mandamus petition is seen as being unusual because it is rare for regulated businesses to persuade appeals courts to order federal agencies to respond to their rulemaking petitions, meaning the delay has been a matter of years, not months. It is not clear whether Coinbase’s petition will be successful.