In a recent development that highlights the ongoing tension between the U.S. Securities and Exchange Commission (SEC) and cryptocurrency exchanges, the SEC has yet again deferred making a decision on Coinbase’s proposal for clearer crypto regulation. Despite the filing of the rulemaking petition by Coinbase in July 2022, which sought definitive guidelines for the crypto industry, the SEC has postponed any decisive actions until December 15, 2023. This delay marks a continued pattern of procrastination from the regulator, raising concerns within the crypto community.
Coinbase’s Chief Legal Officer, Paul Grewal, expressed frustration over the SEC’s latest move, interpreting it as further stalling. The exchange has repeatedly urged the SEC for action, but their requests have been met with resistance, as no substantial progress has been made in the last sixteen months.
Increased legal scrutiny on crypto exchanges
Concurrently, the SEC has actively pursued legal actions against cryptocurrency companies. The recent lawsuit against Kraken, accused of operating an unregistered securities exchange, exemplifies the SEC’s aggressive stance. This move follows a similar pattern to the lawsuit filed against Coinbase earlier this year, suggesting a systematic approach by the SEC towards major crypto exchanges.
Cameron Winklevoss, a prominent figure in the crypto industry, commented on the SEC’s actions, expressing support for the exchanges and anticipating that these legal battles would result in further setbacks for the SEC. Bloomberg ETF analyst James Seyffart also noted the similarities between the lawsuits against Kraken and Coinbase, highlighting the SEC’s classification of certain digital assets as securities.
Coinbase CEO comments on the industry’s future
Amidst these developments, Coinbase CEO Brian Armstrong commented on the resignation of Binance CEO Changpeng Zhao and the hefty fine imposed on him. Armstrong pointed out that Coinbase’s efforts to comply with U.S. regulations, though challenging, were a correct strategic decision. He expressed hope that the latest events could serve as a catalyst for establishing clear regulatory frameworks for the cryptocurrency industry in the United States.
Armstrong’s comments reflect a broader sentiment in the crypto community, emphasizing the need for regulatory clarity to foster growth and stability in the sector. The ongoing legal tussles and the lack of clear regulations have created a challenging environment for crypto exchanges operating in the U.S.
