In the ongoing clash between Coinbase and the U.S. Securities and Exchange Commission (SEC), Coinbase Appeal shows it’s steadfast in its quest for clear rules on cryptocurrencies tagged as securities
Coinbase’s Fight for Crypto Regulation: Challenging SEC’s Denial
In the ongoing clash between Coinbase and the U.S. Securities and Exchange Commission (SEC), Coinbase is steadfast in its quest for clear rules on cryptocurrencies tagged as securities.
The heart of the matter is Coinbase’s challenge to the SEC’s rejection of its request for crypto rulemaking. This move underscores the exchange’s dedication to navigating the changing world of crypto regulations in the United States.
Coinbase, a major U.S. crypto exchange, faced off with the SEC when its plea for crypto rulemaking got turned down on December 15.
Unfazed, Coinbase promptly fired back by appealing, signaling its determination to contest the SEC’s decision. Paul Grewal, Coinbase’s Chief Legal Officer, promptly pledged swift action upon catching wind of the SEC’s denial.
The legal tussle escalated when the U.S. Third District Court of Appeals stepped in, issuing an order on December 18 for the SEC to submit its decision record by January 24, 2024. This formal step adds gravity to the dispute, emphasizing the need for a thorough review of the SEC’s rejection.
Coinbase’s legal challenge unfolds against the backdrop of its persistent efforts to push the SEC into responding to its rulemaking plea. The exchange, in its appeal, carefully details the extensive process it underwent, labeling the SEC’s denial as “arbitrary and capricious, an abuse of discretion, and contrary to law, in violation of the Administrative Procedure Act.”
The core of Coinbase’s legal battle lies in its claim that the SEC’s refusal to partake in rulemaking while simultaneously pursuing actions against Coinbase and others goes beyond its statutory authority.
Coinbase argues that this approach not only breaches the Administrative Procedure Act but also opposes fundamental fairness principles.
The SEC’s denial letter, in response to Coinbase’s plea, criticized the absence of “text or substance of any proposed rule,” a prerequisite for such pleas.
The regulatory body also disagreed with Coinbase’s assertion that existing regulations were “unworkable” and reaffirmed its discretion over the timing and priority of regulations. This denial faced sharp criticism from the crypto community, highlighting the broader tension between the crypto industry and regulators.
Following the denial, SEC Chair Gary Gensler released a statement defending the decision, citing the applicability of existing laws and regulations to crypto securities markets.
He stressed the SEC’s role in tackling these markets through rulemaking and underscored the importance of the Commission’s discretion in setting its rulemaking priorities.
Headquartered in San Francisco, Coinbase has been a staunch advocate for the crypto industry, contributing to political causes, lobbying, and public support.
See Also: The U.S. Securities and Exchange Commission Clashes with Coinbase Over Crypto Regulations in 2023
Coinbase Takes On SEC: Reasons For The Coinbase Appeal
In its bid to contest the SEC’s rejection of its rulemaking plea, Coinbase, a major player in cryptocurrency exchange, is putting forth a detailed argument challenging the regulatory body’s decision.
Coinbase Appeal centers around the claim that the SEC’s dismissal was not just arbitrary but also a violation of the Administrative Procedure Act, according to Coinbase.
The exchange, in its comprehensive appeal, lays out the steps it took to prompt the SEC’s response to its rulemaking plea. Coinbase accuses the SEC of acting “arbitrarily and capriciously, an abuse of discretion, and contrary to law.” This strong language highlights Coinbase’s belief that the SEC’s denial lacks a solid legal basis.
A key aspect of Coinbase’s legal challenge is its assertion that the SEC’s refusal to participate in rulemaking while simultaneously pursuing enforcement actions against Coinbase and others goes beyond its statutory authority.
Coinbase argues that this dual approach not only breaches established legal procedures but also contradicts fundamental fairness principles.
The SEC, responding to Coinbase appeal, criticized the plea for lacking the “text or substance of any proposed rule,” a requirement deemed crucial by the regulatory body.
Despite this criticism, Coinbase maintains its stance that existing regulations are “unworkable” and asserts that the SEC holds discretion over the priority and timing of regulation.
The friction between Coinbase and the SEC mirrors broader challenges within the crypto industry as it seeks regulatory clarity.
As the appeal progresses, Coinbase’s presented grounds indicate a determined effort to contest the SEC’s decision.
The exchange’s argument that the SEC’s denial is arbitrary and violates legal norms adds an intriguing layer to the ongoing narrative of crypto regulation in the United States.
The result of this appeal will undoubtedly have implications not only for Coinbase but also for the broader crypto industry and the regulatory framework governing digital assets in the country.
See Also: Coinbase Gears Up for Ultimate Attempt to Swiftly Dismiss SEC Allegations
How SEC Responds To Coinbase’s Appeal
Coinbase Appeal has become a central point in the ongoing push to establish clear rules for cryptocurrencies labeled as securities.
The SEC, in its letter rejecting Coinbase’s request for rulemaking, pinpointed a crucial issue – the absence of “text or substance of any proposed rule,” a key requirement for such pleas.
This forms the crux of the SEC’s position, emphasizing the need for a well-defined proposal in any rulemaking request. Coinbase Appeal argues that existing regulations are “unworkable,” setting the stage for a clash of perspectives between the exchange and the SEC.
Importantly, the SEC asserts its authority over the timing and priority of regulations, a point that Coinbase challenges in its appeal. The regulatory body, led by Chair Gary Gensler, released a statement reiterating the applicability of current laws and regulations to crypto securities markets.
As the legal proceedings unfold, the SEC’s response and rationale emerge as a strong counterpoint to Coinbase’s arguments. The clash between these entities is emblematic of the broader discussion around cryptocurrency regulation in the United States.
Here, the stakes are high, and the outcomes will sculpt the future of the crypto industry. Coinbase Appeal marks a pivotal moment in the ongoing dialogue between regulators and the crypto community, where both sides grapple with the complexities of balancing innovation and regulatory oversight.
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