The US Securities and Exchange Commission (SEC) rejects Coinbase’s petition to create a new regulatory framework for digital assets.
In a new letter to Coinbase, the regulator says it disagrees with the cryptocurrency exchange’s assessment that securities laws should not apply to the digital asset industry.
“The Commission has carefully considered that recommendation, as well as the petition and comment letters. After such consideration, and in the exercise of its broad discretion to set its regulatory agenda, the Commission concludes that the requested regulation is not currently justified and denies the petition.
The Commission disagrees with the Petition’s assertion that the application of existing securities statutes and regulations to crypto assets, issuers of those securities, and intermediaries in the trading, settlement, and custody of those securities is unworkable.
In his own statement, SEC Chairman Gary Gensler agreed with the SEC’s assessment and said there is no need for crypto-specific laws as securities laws already protect consumers.
“I was pleased to support the Commission’s decision for three reasons. First, existing laws and regulations apply to the crypto securities markets. Secondly, the SEC is also targeting the crypto securities markets through regulation. Third, it is important to preserve the Commission’s discretion in setting its own regulatory priorities.
Existing laws and regulations already apply to the crypto securities markets. There is nothing about the crypto securities markets that indicates that investors and issuers are any less deserving of the protection of our securities laws.”
However, two of the SEC’s commissioners – Hester Peirce and Mark Uyeda – disagree with the SEC’s response, saying virtual currencies need their own laws.
“We do not agree with the Commission’s decision. We recognize that the Commission has broad discretion in determining the timing and priorities of its regulatory agenda. In our view, the petition raises issues arising from new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator.
Any exploration of these issues should include public roundtables, draft releases and requests for comments, which would give us the opportunity to hear from a wide range of market participants and other interested parties. Then, based on what has been learned, the Commission could provide advice or develop regulations if necessary.”
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