The United States Securities and Exchange Commission (SEC) will continue its regulation-by-enforcement approach to the cryptocurrency industry for as long as it can to satisfy its goal of “choking” the industry, according to crypto exchange Coinbase.
“The SEC is serious about the destruction of digital assets,” Coinbase declared in a May 31 filing with the U.S Court of Appeals in its ongoing effort to push the court to force the SEC to begin making fair rules for the crypto industry.
Although, the exchange argues that the agency doesn’t seem willing to come to the table to establish clear and fair guidelines.
“Giving the agency further opportunity to explain itself is both pointless and exquisitely undeserved,” it added.
Coinbase claimed that the SEC “has no duty” to make compliance with its rules possible and the agency believes its rules are “workable enough” because it has taken legal action against several firms in the industry already for violating them.
The exchange further told the court to not just take its word for it before reiterating the stance of other SEC Commissioners who also believe that the SEC is hindering the digital assets industry and welcoming the extinction of new technology.”
One of the most vocal pro-crypto SEC commissioners, Hester Pierce, recently published a letter pitching a cross-border sandbox program between U.S and U.K. blockchain firms experimenting with tokenized securities, Cointelegraph reported on May 30.
“One of the problems that we’ve had is that people have tried to come into the SEC to get relief, but, you know, you sort of come in, and nothing happens. This would […] force the SEC’s hand a little bit,” Pierce said during a panel at Consensus 2024.
SEC believes its heavy-handed approach only poses difficulties for some
Meanwhile, Coinbase also noted that the SEC has attempted to mitigate its heavy-handed approach to the crypto industry by claiming that its rules may only pose challenges for a small segment of the industry.
“The SEC tries to minimize its oppressive stance by asserting that only a “small set of market participants” “may” experience “compliance difficulties” under “discrete provisions” of existing rules,” it claimed.
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The SEC initiated the lawsuit against Coinbase in June 2023 alleging that Coinbase has never registered as a broker, national securities exchange or clearing agency, evading the disclosure scheme for securities markets.
Coinbase has sought to have the case dismissed, yet the SEC has consistently opposed their attempts. Despite optimism from the crypto industry, and legal experts alike, that Coinbase would have the case dismissed, it wasn’t successful.
On Jan. 21, Cointelegraph reported that Bloomberg senior litigation analyst Elliott Stein forecasted a 70% chance of the exchange securing a full dismissal in the lawsuit after attending a hearing.
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