Coinbase slams SEC for ‘choking’ crypto industry – What now?

• Coinbase accuses SEC and Chair Gary Gensler of stifling crypto. 
• Coinbase challenges SEC with concerns about crypto custody dominance.

A new development has surfaced amid the legal dispute between the United States Security and Exchange Commission (SEC) and the crypto exchange Coinbase.

In a recent filing, Coinbase has accused the SEC and its chairman, Gary Gensler, of attempting to curb the cryptocurrency sector.

The letter highlighting the SEC’s recent surge in enforcement actions against various crypto entities noted, 

“The government is intent on crushing the digital asset industry.” 

The filing coincides with an ongoing legal dispute wherein the SEC has accused Coinbase of conducting unregistered asset sales termed “securities” by the regulatory body.

What is Coinbase claiming? 

The filling highlighted four main arguments. 

“These responses demonstrate that the SEC is bent on choking the digital asset industry, and is tightening the squeeze by refusing to provide the necessary rules the industry has requested.” 

Here, Coinbase is challenging the SEC’s legal assertions, accusing them of inconsistency and lack of support. The exchange alleges that the SEC’s actions aim to suppress the crypto industry rather than facilitate compliance with the law. 

Additionally, Coinbase argues that the SEC’s jurisdiction over the digital asset sector is unlawful and seeks to implement significant policy changes through punitive measures.

On the flip side, many industry insiders have expressed concerns about Coinbase’s overwhelming control in the crypto custody sector.

Bitwise’s CIO Matt Hougan believes that the challenging regulatory landscape inadvertently benefits Coinbase by creating a barrier to entry for competitors.  He said, 

What lies ahead? 

As stakeholders are divided on the thought of crypto regulation, one thing is certain: the cryptocurrency industry is hindered by uncertainty due to unclear guidelines and an absence of formal rules. 

Hence, many voices within the industry are calling for a court mandate that would compel the SEC to embark on rulemaking. They argue that such action is imperative for bringing clarity and stability to the digital asset landscape.