US SEC says no to new crypto rules

In a 3-2 vote, the five-member commission decided not to implement new rules, insist on a fundamental disagreement with Coinbase's claim that existing regulations are 'unworkable' for the crypto industry. Subsequently, Coinbase announced the filing of a petition to review the SEC's decision in court.

The dispute is part of a broader disagreement between the crypto sector and the US markets regulator, which has repeatedly said most crypto tokens are securities and subject to its jurisdiction. The agency has sued several crypto companies, including Coinbase, for listing and trading crypto tokens which it says should be registered as securities. ‘Existing laws and regulations apply to the crypto securities markets,’ said the commission’s officials.

Coinbase positioned itself against the commission’s statement

Officials from Coinbase said that no one looking fairly at their industry thinks the law is clear or that there isn’t more work to do. They should be working together to create laws and rules that will benefit consumers and US innovation.

Shortly thereafter, Coinbase notified a federal court of appeals in Philadelphia of its plans to seek review of the SEC's denial.

The push for regulatory change

In 2022, the crypto exchange pressed the SEC to create a bespoke set of rules for the crypto sector, arguing that existing US securities laws are inadequate. In April 2023, Coinbase appealed to a judge to force the SEC to respond to the petition.

The court said it would not force the agency to act, given the SEC had said it would respond to Coinbase's petition.

Crypto firms have stated that they want a clearer idea of when the SEC views a digital asset to be a security.

The SEC’s head said that in asking the SEC to write rules, Coinbase had acknowledged the SEC's authority over the crypto sector, something the crypto exchange has refuted in the past.

In response, Coinbase noted that in their view, the petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator.