Coinbase Accuses SEC of Trying to Destroy Crypto Industry, Urges Rulemaking

According to a recent The Block report, Coinbase is urging a court to order the SEC to establish official rules for crypto. The company argues that current regulations are unclear and put crypto firms in a difficult position.

In a legal brief, Coinbase accuses the SEC of demanding compliance with undefined guidelines and then punishing companies that can't meet those unknown standards. They claim the SEC is deliberately hindering the industry by refusing to provide clear rules.

Coinbase further argues that the SEC's approach is a major policy shift, despite the agency's claims otherwise. They say the SEC is simply applying vague principles to a new asset class.

This legal battle is the latest chapter in an ongoing conflict between Coinbase and the SEC regarding crypto regulations. Coinbase first petitioned for official rulemaking in July 2022. While the SEC hasn't created specific crypto rules, they have proposed broader regulations that could apply to crypto assets. Coinbase argues these existing rules are poorly suited for the unique nature of cryptocurrency.

The SEC has also taken legal action against crypto platforms, including a lawsuit against Coinbase itself. In response, the crypto industry criticizes the SEC for selectively enforcing existing regulations instead of creating clear guidelines.

Coinbase sued the SEC in April 2023, seeking a definitive answer on the rulemaking petition. The SEC ultimately denied the request, stating existing rules are sufficient. They also cited resource allocation as a reason for not prioritizing new crypto regulations.

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The Block