Coinbase utilized ongoing political developments in the U.S. Congress to strengthen its interlocutory appeal against the SEC. In a court filing dated May 24, Coinbase contended that the SEC attempted to "bypass" the Howey test, a legal standard used to identify securities. The crypto sector and the SEC have long disputed the application of this test to digital assets.
The SEC is allegedly being ignored by Coinbase
Chief Legal Officer of Coinbase, Paul Grewal, outlined the exchange's stance. He said that the main concern was whether the SEC could regulate transactions involving cryptocurrencies as "investment contracts" in the absence of any contractual responsibilities.
Grewal emphasized the SEC's identical appeal in the Ripple case and pointed out its inconsistencies. He emphasized how crucial this unresolved legal matter is to the cryptocurrency sector. The CEO further argued that the SEC has a long history of not cooperating with business executives.
“We initially approached the SEC with sincere efforts to discuss a feasible and balanced regulatory framework for crypto innovation in the U.S. However, we, like much of the industry, were met with closed doors, inconsistent stances, and litigation,” Grewal stated.
Coinbase notably highlighted recent legislative actions that could affect the SEC’s authority over the emerging industry.
Last week, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21), potentially shifting more regulatory power to the Commodity Futures Trading Commission (CFTC).
This bill, strongly opposed by SEC Chair Gary Gensler, seeks to regulate the crypto markets and has significant support from industry stakeholders.
“Legislators' opposition to the SEC's stance has intensified: just this week, the U.S. House of Representatives passed comprehensive digital asset legislation with bipartisan support, which would limit the SEC's claimed expansive jurisdiction,” Coinbase wrote.
Grewal emphasized that this move is a start in the right direction toward improved regulatory monitoring and a good change in the political scene. Additionally, he restated Coinbase's dedication to securing industry transparency and thwarting regulatory overreach.
"We're looking for clarity in the Courts as well, and the House acknowledged earlier this week that clear regulations are necessary. Nevertheless, we're determined to see this through to the end, no matter how long it takes to provide clarity for the whole sector and retaliate against overbearing authorities. It's what the 52 million Americans who hold cryptocurrency are entitled to," said Grewal.
May 2024, Cryptoniteuae