The
US Securities and Exchange Commission (SEC) has denied Coinbase Global’s
petition for the establishment of new rules governing the digital asset
industry. Coinbase, a major crypto exchange, had sought tailored regulations
for the crypto sector, arguing that current U.S. securities laws were
inadequate.
However,
SEC Chair Gary Gensler, in a letter to Coinbase’s chief legal officer,
expressed disagreement with the assertion that existing securities regulations
are unworkable for the crypto sector.
In
a statement on the SEC’s website, Gensler emphasized that current laws already
apply to crypto securities markets, citing the flexibility of the Supreme
Court’s Howey test, which has been successfully applied to crypto assets by
federal courts. He rejected claims that identifying an “issuer” of
crypto asset securities is unfeasible, underscoring the importance of
disclosure and protection for investors.
The
SEC Chair highlighted the Commission’s ongoing rulemaking initiatives to
address crypto securities markets. Despite Coinbase‘s assertion
that now is the right time for regulatory action, Gensler pointed to existing
efforts, such as the Special Purpose Broker-Dealers Release, providing a
five-year period for broker-dealers in crypto asset securities. He also noted
proposed rules and enforcement actions related to crypto assets, stressing
the need for flexibility in response to evolving markets.
US SEC denies Coinbase petition for crypto rulemaking https://t.co/7fhLQvLuEJ pic.twitter.com/S46RF03Qyi
— Reuters (@Reuters) December 15, 2023
Registration
and Compliance Crucial for Market Integrity
Maintaining
Commission discretion was emphasized as crucial for deploying resources
effectively and prioritizing regulatory agendas. Gensler highlighted that the
crypto market, while susceptible to fraud and noncompliance, constitutes a
small portion of the broader $110 trillion capital markets.
Commission
discretion allows for a focused approach to areas needing updated regulation.
Gensler concluded by stating that despite challenges, meaningful engagement,
registration, and compliance are essential for investor protection and market
integrity. The SEC‘s
decision to deny the petition aligns with the view that existing securities
regulations appropriately govern crypto asset securities, ensuring full
disclosure and a level playing field for industry participants.
The
US Securities and Exchange Commission (SEC) has denied Coinbase Global’s
petition for the establishment of new rules governing the digital asset
industry. Coinbase, a major crypto exchange, had sought tailored regulations
for the crypto sector, arguing that current U.S. securities laws were
inadequate.
However,
SEC Chair Gary Gensler, in a letter to Coinbase’s chief legal officer,
expressed disagreement with the assertion that existing securities regulations
are unworkable for the crypto sector.
In
a statement on the SEC’s website, Gensler emphasized that current laws already
apply to crypto securities markets, citing the flexibility of the Supreme
Court’s Howey test, which has been successfully applied to crypto assets by
federal courts. He rejected claims that identifying an “issuer” of
crypto asset securities is unfeasible, underscoring the importance of
disclosure and protection for investors.
The
SEC Chair highlighted the Commission’s ongoing rulemaking initiatives to
address crypto securities markets. Despite Coinbase‘s assertion
that now is the right time for regulatory action, Gensler pointed to existing
efforts, such as the Special Purpose Broker-Dealers Release, providing a
five-year period for broker-dealers in crypto asset securities. He also noted
proposed rules and enforcement actions related to crypto assets, stressing
the need for flexibility in response to evolving markets.
US SEC denies Coinbase petition for crypto rulemaking https://t.co/7fhLQvLuEJ pic.twitter.com/S46RF03Qyi
— Reuters (@Reuters) December 15, 2023
Registration
and Compliance Crucial for Market Integrity
Maintaining
Commission discretion was emphasized as crucial for deploying resources
effectively and prioritizing regulatory agendas. Gensler highlighted that the
crypto market, while susceptible to fraud and noncompliance, constitutes a
small portion of the broader $110 trillion capital markets.
Commission
discretion allows for a focused approach to areas needing updated regulation.
Gensler concluded by stating that despite challenges, meaningful engagement,
registration, and compliance are essential for investor protection and market
integrity. The SEC‘s
decision to deny the petition aligns with the view that existing securities
regulations appropriately govern crypto asset securities, ensuring full
disclosure and a level playing field for industry participants.
