The America crypto exchange Coinbase submitted a petition to the US Federal court demanding the Securities and Exchange Commission (SEC) to provide responses to their July submission. Coinbase had issued a report to the regulators seeking legal permission for the crypto exchange to operate within the old SEC regulations.
Overview of the Coinbase Petition
On April 24, Coinbase requested the court to take legal action, which will compel the SEC to provide their response to their pending petition. A review of the submitted petition demonstrated that the Coinbase team had advised the SEC to implement a clear regulatory framework for crypto assets in the US.
Also, Coinbase formulated 50 open-ended questions concerning digital assets supervision. The questions revolved around crypto regulation, including classifying digital assets as securities and commodities.
Citing the Administrative Procedure Act (APA), the Chief Legal Officer at Coinbase, Paul Grewal, argued that SEC ought to respond to the July petition within a specific timeframe. Grewal admitted that the SEC failed to react to their submission for nine months.
Besides reacting to the Coinbase petition, the SEC has withheld crucial information from the public concerning crypto regulations. Grewal suspects that the SEC might reject their petition.
Importance of Redefining SEC Crypto Regulations
In light of Grewal’s announcement, he restated that SEC’s unresponsive approach has compelled the crypto exchange to engage the authority. He reiterated that the court would order the SEC to share their final thought concerning the Coinbase petition.
In his statement, Grewal underscored the need for regulatory clarity in enforcing crypto regulations. Recounting the March 22 Well Notice, which documented the potential legal action against Coinbase Grewal, calls for the regulators to improve the sustainability and clarity of the regulations.
He observed that the SEC had submitted numerous lawsuits against crypto firms in the US. Grewal lamented that despite the stricter SEC regulatory measure, it is still unclear on the strategies the regulators will adopt to supervise crypto assets.
Besides the Coinbase regulatory pressures, the San Francisco crypto exchange Kraken was accused by the SEC of violating the US securities regulation. On their February 9 submission, the SEC announced that Kraken offered unregistered crypto assets, including staking products.
After following multiple court proceedings, the crypto exchange was compelled to settle penalties amounting to $30 million. Also, Kraken was ordered to suspend the operation of the staking-as-a-services.
Commenting on the SEC regulation, one of the commissioners, Hester Peirce, condemned the authority for adopting unfair and ineffective regulatory approaches. Peirce regretted that the SEC closed one program that provided the consumer with vital crypto-related services.
Furthermore, in February, the SEC collaborated with the Department of Financial Services in New York to stop Paxos, a popular stablecoin issuer, from issuing tokens and engaging in crypto mining activities.
Coinbase Expansion to New Market
Following the healthy appetite to regulate the US crypto industry, Coinbase is seeking a suitable offshore market. A few days ago, the crypto exchange was pleased to announce that its Bermudian virtual assets service provider license was approved.
The Coinbase Bermuda team plans to launch a crypto derivative platform before the end of April. The expansion to new markets has created anxiety among markets analyst.
As of this writing Coinbase trading platform rank among the top public-traded exchanges in the US. Following this, on May 4, the crypto exchange plans to publish the earning report. The imminent earning report will enable the market analyst to examine the financial health of Coinbase.