Coinbase, a prominent cryptocurrency exchange, continues its legal battle against the United States Securities and Exchange Commission (SEC), urging the court to compel the agency to initiate a rulemaking process for the crypto industry. Here are the key points from Coinbase’s legal actions:
Coinbase accuses the SEC of violating the Administrative Procedures Act (APA) by denying its petition for crypto rules without providing adequate justification. The exchange argues that the SEC’s refusal lacked reasoned justification and constitutes arbitrary and capricious behavior.
The SEC’s denial of Coinbase’s petition, citing existing securities laws as sufficient, is contested by Coinbase, which insists that the SEC must engage in a formal rulemaking process to clarify how securities laws apply to cryptocurrencies.
Coinbase seeks court intervention to review the SEC’s denial, overturn it, and compel the agency to initiate the rulemaking process. The exchange asserts that the SEC’s abrupt change in position regarding its authority over crypto requires a transparent and inclusive rulemaking process.
Coinbase accuses the SEC of inconsistency in its stance on crypto regulation, alleging that the agency previously acknowledged limited authority over crypto but later claimed broader regulatory power.
The exchange contends that the SEC’s shift in position requires congressional approval and cannot be unilaterally implemented without proper rulemaking procedures.
Ongoing Legal Battle:
Coinbase’s appeal against the SEC’s rulemaking denial is separate from the SEC’s lawsuit filed in June 2023, which alleges that Coinbase operated as an unlicensed exchange and offered unregistered securities.
The exchange’s legal strategy emphasizes the argument that the SEC lacks authority over crypto exchanges without explicit authorization from Congress.
Coinbase’s legal challenge against the SEC underscores the ongoing regulatory uncertainty surrounding the cryptocurrency industry. By pushing for a formal rulemaking process, Coinbase aims to establish clear guidelines and regulatory clarity for the crypto market. The outcome of this legal battle could significantly impact the regulatory landscape for cryptocurrencies in the United States.
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