- The U.S. Securities and Exchange Commission denied Coinbase’s request for comprehensive crypto regulations, saying formal rulemaking is not well suited for emerging technology.
- Coinbase had submitted a petition requesting clear standards for listing crypto securities, arguing the lack of clarity was inhibiting innovation.
- The crypto industry expressed disappointment at the SEC’s refusal to provide regulatory clarity, with some calling the stance short-sighted. Coinbase says it will continue pushing for regulated crypto markets.
The U.S. Securities and Exchange Commission has denied Coinbase’s request for comprehensive crypto regulations. The exchange had formally petitioned the agency to start writing rules for the industry. However, after “careful” consideration, the SEC said no.
Background
Coinbase submitted a petition to the SEC in March requesting clear rules for listing crypto securities. The exchange argued that the lack of regulatory clarity was inhibiting innovation in the industry.
Without concrete standards, Coinbase said crypto firms were left guessing whether their products complied with securities laws. This ambiguity has led some companies to avoid launching products in the U.S. altogether.
SEC’s Response
But in a blunt response this week, the SEC said no to Coinbase’s request.
“We do not believe that the requested rulemaking is necessary or appropriate,” the agency wrote in a letter to the exchange.
The SEC said it has been providing guidance to market participants all along through litigation and public statements. And this approach should continue, rather than resorting to formal rulemaking which “is not well suited for an emerging technology.”
Industry Reaction
The crypto industry expressed disappointment at the SEC’s stance.
Faryar Shirzad, Coinbase’s chief policy officer, tweeted that the regulator’s response “serves the American public poorly.”
Other executives and lawyers also lamented the SEC’s reluctance to provide regulatory clarity.
Bradley Sostack of the law firm Stradley Ronon said the agency was being “short-sighted” by refusing to engage on these issues.
Conclusion
The SEC’s rejection deals a blow to crypto companies hoping for clear rules of the road. For now, the industry’s regulatory status remains murky.
But Coinbase isn’t giving up. The exchange tweeted that it will continue its “dialogue” with the SEC and push for a regulated market.
