Coinbase’s lawyers urged the court to reverse the SEC’s decision to regulate the crypto sector under existing securities laws.
Coinbase is a US-based Nasdaq-listed crypto exchange. This exchange is known as a highly regulated crypto platform in the country, but has been facing a lawsuit by the US Securities and Exchange Commission (SEC) since mid-2023 for conducting unregistered securities offerings and operating an unregistered national stock exchange .
As we know, the Coinbase team has requested that the SEC create a new set of rules to regulate the crypto sector, rather than regulation through blind enforcement actions in favor of traditional securities laws. In December 2023, the SEC body rejected Coinbase’s request by a 3-2 vote.
SEC Commissioners Hester Peirce and Mark Uyeda opposed this decision, saying that the crypto and blockchain sector needs a special regulatory framework and cannot be regulated through existing laws.
On March 11, 2024, Coinbase’s lawyers appealed to the Third Circuit Court of Appeals to overturn the SEC’s decision and order the agency to start developing rules.
Coinbase Chief Legal Officer Paul Grewal informed the crypto community that Coinbase lawyers oppose the SEC’s poor decision for this innovative sector.
Grewal also said that the Coinbase team has advocated to the SEC body on behalf of dozens of concerns and asked how the SEC body is qualified to regulate this industry.
According to Grewal, the SEC body abused its power to regulate the crypto sector outside the regulatory realm and also received additional authority from Congress to enforce crypto companies.
SEC vs crypto companies
However, the SEC body actively took action against crypto companies for years, but by early 2023, SEC’s blind enforcement actions were poorly visible.
Due to uncertain regulatory actions, many crypto companies expanded their services outside the US and some exited the US crypto market.
Currently, Coinbase, Binance, Kraken, and Ripple-like companies are vigorously fighting the SEC lawsuits.
Also read: Former US President Trump says he will not pursue regulatory action against Bitcoin