Regulation
Coinbase presents a final summary of the SEC regulatory battle
Coinbase formally filed its closing brief with the Third Circuit, seeking to overturn the SEC’s denial of its rulemaking petition. This legal document is part of an ongoing dispute between the cryptocurrency exchange and the regulatory body over clarity and fairness in the governance of digital assets.
Tension between Coinbase and the SEC has escalated following the commission’s rejection of Coinbase’s request for more explicit regulation. Paul Grewal, Chief Legal Officer of Coinbase, communicated via an X post that this case is based on a critical and conclusive statement within the SEC denial.
It argues that the SEC’s decision lacked substantive reasoning, which forms the basis of Coinbase’s appeal to stay the order.
Today we filed our closing brief with the Third Circuit challenging the SEC’s denial of our rulemaking petition. At the heart of this case is a single closing sentence in the SEC order under review. That phrase – that “I don’t agree[d]”that SEC rules are unworkable for digital…
— paulgrewal.eth (@iampaulgrewal) May 31, 2024
Furthermore, Coinbase’s legal arguments highlight the need for congressionally approved jurisdiction and unambiguous rules before the SEC can extend its regulatory reach into new industries such as cryptocurrencies.
The exchange argues that such measures are essential to promoting innovation and growth in the US digital assets market. SEC Chairman Gary Gensler argues that digital assets fall under existing regulations, a position that Coinbase and others in the industry dispute, calling for specific regulations that align with the unique aspects of cryptocurrencies.
As the Third Circuit reviews this brief, the outcome will likely impact Coinbase and the broader landscape of digital asset regulation. This case highlights the need for a regulatory framework that balances innovation with investor protection.
Read also: Definition of the investment contract between Coinbase and SEC