Coinbase, one of the largest cryptocurrency exchanges, has criticized the US Securities and Exchange Commission’s (SEC) “regulation by enforcement” approach. The company claimed that it creates “an unreasonable and unfair burden” on cryptocurrency companies and hampers innovation in the industry. Coinbase’s statement comes amid a rebound in the crypto market, with Bitcoin surging above $50,000 again after a period of decline. As the industry continues to grow, regulatory issues will become increasingly vital, and Coinbase seems poised to take a leading role in shaping the industry’s future.
Coinbase is challenging the US Securities and Exchange Commission (SEC) over its enforcement actions against key players in the industry. The exchange argues that the SEC should focus on creating proper securities rules and guidance instead. In an ongoing insider trading case involving the SEC and Wahi, Coinbase filed an amicus brief urging the court to dismiss the allegations. The Chamber of Digital Commerce (CDC) filed amicus briefs last month in the same case, also calling for its dismissal. The CDC stated that the SEC’s regulation by enforcement is a threat to the US digital market and its investors. Coinbase’s Chief Legal Officer, Paul Grewal, tweeted that the exchange had tried to register with the commission to offer digital asset securities, but all efforts were unsuccessful, and the ongoing case only exacerbates the situation. Regulators have clamped down on the crypto sector, resulting in the collapse of three crypto-friendly banks: Silvergate, Silicon Valley, and Signature bank. The SEC has also pursued legal actions against Kraken, Coinbase, Binance, and Paxos over Binance stablecoin, BUSD, for not registering its staking services.