Coinbase files petition on crypto regulations

The crypto exchange filed a petition for rulemaking with the SEC in 2022 in which it urged the regulator to provide clarity on the conditions under which a digital asset is a security

Coinbase Global Inc filed a petition on Monday in an attempt to force the U.S. Securities and Exchange Commission (SEC) to make new rules for digital assets, the firm stated in a blog post, in the latest rise of the crypto currency exchange’s tensions with the securities regulator.

The crypto exchange filed a petition for rulemaking with the Securities and Exchange Commission in 2022 in which it urged the regulator to provide clarity on the conditions under which a digital asset is a security and make a new market framework that is in line with crypto currencies.

The Securities and Exchange Commission has not reacted publicly to that petition, which led to Coinbase filing the legal challenge, stated Coinbase CLO Paul Grewal.

Coinbase and other crypto firms are facing potential regulatory enforcement actions from the Securities and Exchange Commission, even though we have not been informed how the Securities and Exchange Commission thinks the law applies to our business, he stated.

The petition will be filed in the U.S. Court of Appeals for the Third Circuit.

The crypto sector generally believes it operates in a regulatory gray area not controlled by current U.S. securities laws, and that new legislation is required to regulate the sector.

Securities and Exchange Commission Chair Gary Gensler has stated crypto currency companies should comply with current laws and that new crypto-specific regulations are not required.

Coinbase revealed in March the company had been told that Securities and Exchange Commission staff intended to propose enforcement action against the firm. The firm stated in a blog post at the time that it was prepared to fight any upcoming enforcement action in court.

In July, when Coinbase also put forward its petition for rulemaking, the company revealed a Securities and Exchange Commission investigation into its asset listing processes, staking programs and yield-generating products.