2024-09-24 12:52:21 : Coinbase and U.S. securities regulators faced off Monday in a federal appeals court in Philadelphia, with the cryptocurrency exchange urging the agency to create new rules for digital assets.
In the petition, it urges the SEC to clarify the status of digital assets as securities and create a new market structure framework compatible with cryptocurrencies.
The U.S. Securities and Exchange Commission (SEC) rejected Coinbase’s petition for new rules in December 2023, saying it fundamentally disagreed that current regulations were “unworkable” for the cryptocurrency industry.
Coinbase asked a federal appeals court on Monday to overturn the denial, saying the SEC made it impossible for the cryptocurrency company to operate and comply with U.S. regulations.
Coinbase lawyer Eugene Scalia told the three-judge appeals court that the SEC was arbitrary and capricious by not providing Coinbase with more answers on how to register with the agency and comply with U.S. law. of.
An attorney for the Securities and Exchange Commission argued that the agency does not need to create new rules for the industry and that existing regulations are sufficient.
“If Coinbase wishes to structure its operations in a manner that is inconsistent with the existing regulatory framework, it does not have the authority to adjust the framework to meet its business needs,” SEC attorney Ezekiel Hill said.
Three appeals court judges heard arguments from both sides, noting that the SEC does have discretion in setting rulemaking priorities but also pressuring the regulator to explain why cryptocurrencies are not one of them.
The dispute is the latest in a broader tug-of-war between the crypto industry and the top U.S. market regulator, which has repeatedly said most crypto tokens are securities and subject to its jurisdiction. The agency has sued several cryptocurrency companies, including Coinbase, to list and trade cryptocurrency tokens, saying the tokens should be registered as securities.
Coinbase has denied the accusations and fought back in a separate court case.
The crypto industry largely believes that it operates in a regulatory gray area that is not governed by existing U.S. securities laws and that new legislation is needed to regulate the industry.
© Thomson Reuters 2024
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