Coinbase lawyers urged the court to overturn the SEC’s decision to regulate the cryptocurrency sector under existing securities laws.
Coinbase is a cryptocurrency exchange listed on NASDAQ in the United States. The exchange is known as a highly regulated cryptocurrency platform in the United States, but has been facing lawsuits from the U.S. Securities and Exchange Commission (SEC) since mid-2023 for offering unregistered securities products and operating an unregistered domestic stock exchange.
As we know, the Coinbase team has asked the SEC to create a new set of rules to regulate the cryptocurrency sector instead of regulating through blind enforcement actions in place of traditional securities laws. In December 2023, the SEC agency denied Coinbase’s request by a 3-2 vote.
SEC Commissioners Hester Peirce and Mark Uyeda opposed the decision, saying the cryptocurrency and blockchain sector needs a dedicated regulatory framework and cannot be regulated through existing laws.
On March 11, 2024, Coinbase lawyers appealed to the Third Circuit Court of Appeals to overturn the SEC’s decision and order the agency to begin developing rules.
Paul Grewal, Coinbase’s Chief Legal Officer, told the cryptocurrency community that Coinbase lawyers stand against the SEC’s misguided decisions regarding this innovative sector.
Grewal also said the Coinbase team argued against the SEC agency on behalf of dozens of concerns and asked whether the SEC agency is qualified to regulate the sector.
According to Grewal, the SEC agency has misused its power to regulate the cryptocurrency sector outside of its regulatory sphere and secured additional authority from Congress to enforce cryptocurrency companies.
SEC vs Cryptocurrency Companies
However, while the SEC agency has been proactively taking action against cryptocurrency companies for several years, the SEC’s blind enforcement actions became noticeable in early 2023.
Due to uncertain regulatory measures, many cryptocurrency companies have expanded their services outside the United States, and some have left the U.S. cryptocurrency market.
Currently, affiliates such as Coinbase, Binance, Kraken, and Ripple are strongly opposing the SEC’s lawsuit actions.
Also read: Former US President Trump says he will not pursue regulatory crackdown on Bitcoin