The U.S. Securities and Exchange Commission (SEC) delivered a significant blow to Coinbase, rejecting the exchange’s formal plea for specialized regulations for digital assets.

The SEC’s denial, announced on Friday, marks the culmination of Coinbase’s prolonged wait for a response since its 2022 petition, intensifying a standoff between the prominent exchange and the regulatory body.

SEC’s Rationale for Denial

Chair Gary Gensler led the SEC’s stance, asserting that the existing securities framework adequately governs crypto asset securities. Additionally, Gensler highlighted ongoing initiatives within the SEC to propose targeted crypto regulations and enforce existing authorities, dismissing the necessity for a distinct regulatory regime.

Moreover, Gensler emphasized the importance of maintaining the SEC’s discretion in setting its regulatory priorities. The denial came despite Coinbase’s argument that the SEC lacked clarity in the laws concerning cryptocurrencies and urged for tailored regulations.

Coinbase’s Response and Legal Action

Expressing disappointment with the SEC’s decision, Coinbase’s Chief Legal Officer, Paul Grewal, announced the company’s intent to challenge the rejection in court. Further, Grewal criticized the SEC’s stance as an “abdication of its duty,” emphasizing the industry’s need for clearer regulatory frameworks.

SEC Rejects Coinbase Plea for Tailored Crypto Regulations

Moreover, although two of the five SEC commissioners, Hester Peirce and Mark Uyeda, dissented from the denial, expressing the importance of open dialogue and potential rule changes, the majority opinion prevailed.

Continued Industry Disagreement and Regulatory Landscape

The SEC’s rejection of tailored regulations aligns with its ongoing enforcement actions and rule proposals aimed at crypto businesses. Notably, the wider Financial Stability Oversight Council advocated for congressional intervention regarding crypto regulations in its recent annual report, diverging from the SEC’s stance.

While the crypto industry lobby in Washington continues its pursuit of industry-specific regulations, the SEC’s denial underscores the regulatory friction between major exchanges like Coinbase and the commission’s approach to existing securities laws governing digital assets.

Furthermore, this clash also highlights the ongoing complexity in defining regulatory frameworks for cryptocurrencies within the United States.

Read More:

SaitaChain Successfully Completes STC Token Migration to BNB Chain

Bank of China Concludes Inaugural Cross-Border Trade in Digital Yuan Commodities

Avatar photo

Tanishi is an established writer in the realm of cryptocurrency and blockchain, renowned for her expertise and insightful analysis. With a deep-rooted passion for the dynamic world of digital finance, Tanishi delivers compelling news and articles that captivate a wide-ranging audience.