Coinbase lawyers urged the court to reverse the SEC’s decision to regulate the crypto sector under existing securities laws.
Coinbase is a US-based Nasdaq-listed crypto exchange. This exchange is known as a highly regulated crypto platform in the country but has been facing a lawsuit action by the United States Securities and Exchange Commission (SEC) since mid-2023 over providing unregistered securities offerings & running an unregistered national securities exchange.
As we know, the Coinbase team requested the SEC to create a new set of rules to regulate the crypto sector, instead of regulation through enforcement actions blindly on behalf of traditional securities laws. In Dec 2023, the SEC body rejected Coinbase’s request by a 3-2 vote.
The SEC Commissioners Hester Peirce and Mark Uyeda opposed this decision and said that the crypto & blockchain sector needs a dedicated regulatory framework & can’t be regulated via existing laws.
On 11 March 2024, The Coinbase lawyers appealed to the Third Circuit Court of Appeals to reverse the SEC’s decision and to order the agency to start developing rules.
Coinbase chief legal officer Paul Grewal informed the crypto community that the Coinbase lawyers argued against the SEC’s bad decision for this innovative sector.
Grewal also informed that the Coinbase team argued against the SEC body on behalf of dozens of concerns and asked how the SEC body is qualified to regulate this sector.
According to Grewal, the SEC body misused its power to regulate the crypto sector outside the regulatory domain and also secured additional authority from Congress to enforce crypto companies.
SEC vs crypto companies
However, the SEC body was actively taking action against crypto companies for many years but in early 2023 SEC’s blind enforcement actions were visible badly.
Because of uncertain regulatory actions, many crypto companies expanded their services outside the US and some of them left the US crypto market.
Currently, Coinbase, Binance, Kraken, and Ripple-like companies are fighting against the SEC’s lawsuit actions strongly.
Read also: Former US president Trump says he would not pursue a regulatory crackdown on Bitcoin
