SEC Chair Slams Coinbase’s Calls for Crypto Rules, Seeks Denial of Petition
- The Chairman of the SEC, Gary Gensler, slammed Coinbase’s calls for crypto regulation, stating that “the rules have already been published.”
- Gensler reaffirmed the fact that, apart from the world’s largest cryptocurrency, Bitcoin (BTC), all other crypto coins are securities.
- The regulator also seeks the denial of a petition filed by Coinbase to force the SEC to establish clear crypto regulation.
- The agency stated that regulation may take years, and in the meantime, it will use enforcement actions as a substitute.
The United States Securities and Exchange Commission (SEC) has been blamed for the lack of regulatory clarity in the United States by members of the crypto community and many crypto entrepreneurs. Interestingly, the leading crypto exchange in the US, Coinbase, recently filed a petition asking the regulator to establish rules for crypto firms. However, Chairman of the Commission, Gary Gensler slammed the claims of the crypto exchange, stating that the rules to regulate the industry already exist.
In a May 15 keynote speech at the Financial Markets Conference, Gensler was asked about his agency’s feud with the largest exchange in the US, Coinbase, regarding the establishment of clear rules for crypto regulations and why “the SEC doesn’t publish rules for that market.” Gensler pointed out that “the rules have already been published,” while adding:
“To make it quite direct: this is a field that has been operating largely non-compliant. […] There’s nothing about a new technology that makes it non-consistent with the public policies that Congress has laid out.”
The SEC Chair stated that his agency has already established clear rules regarding cryptocurrencies and what documents are required to custody assets, be an exchange, broker-dealer, or advisor. Gensler claims that the rules are crystal clear on how to register crypto offerings as securities with the regulator.
Currently, the SEC Chair views every cryptocurrency, apart from the world’s largest cryptocurrency, Bitcoin (BTC), as a security, even Ether (ETH), the world’s second-largest crypto coin by market capitalization.
“If the public is investing money and anticipating profit based upon the efforts of others, in a common enterprise, that’s a security,” he stated while noting:
“There’s financial intermediaries, nodes in the network, and they need to come into compliance if they’ve got securities on their platforms.”
As reported earlier by BitcoinWisdom, the regulator issued a Wells Notice to Coinbase claiming that the crypto exchange’s staking services have not been registered with the agency as securities. Paul Grewal, the Chief Legal Officer for the crypto exchange, stated that the SEC did not mention many details in the Notice for the exchange to respond to.
Meanwhile, the CEO of the crypto exchange, Brian Armstrong, believes that crypto investors should try to elect pro-crypto lawmakers. “We are going to elect pro-crypto candidates in this country to make sure that our success is ensured,” said Armstrong after recently debuting the Crypto435 campaign to “grow the crypto advocacy community and share tools and resources.”
SEC Seeks Denial of Petition
It is also important to mention here that on April 25, Coinbase kicked off a new NFT campaign called “Stand With Crypto” after it filed an action to force the SEC to respond to its regulation petition. On the other hand, the regulator has given an official response to the exchange’s petition, stating that official regulations might take years and that, in the meantime, enforcement actions will continue.
The SEC outlined in a court document submitted on May 15 that it is under no obligation to respond to the requirements of Coinbase outlined in its petition, while also arguing that the firm has called for a complex set of reforms and rule-making in an unreasonably short amount of time.
Coinbase executive Grewal took to Twitter to acknowledge the regulator’s response and stated that the agency answered “maybe” to a question that only had a “yes” and “no” as answers.
Grewal stated that the agency’s statement “reinforces” Coinbase’s “longstanding concern” that the crypto industry “does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time, and it is likely to continue changing its mind along the way.”
“We look forward to the opportunity to reply formally next week. And as always, we continue to appreciate the Court’s careful consideration,” Grewal added.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
