US Doesn't Need Cryptocurrency-specific Legislation! SEC Rejects Coinbase's Cryptocurrency Law Petition, Sparking Legal Battle

The U.S. Securities and Exchange Commission (SEC) firmly rejected cryptocurrency exchange Coinbase's petition for a special regulation on cryptocurrencies, marking a significant turning point in the ongoing tug-of-war between regulatory agencies and the crypto industry.

Long Wait for Coinbase Ends in Disappointment

Since 2022, Coinbase has been awaiting a response from the SEC to its petition for specialized cryptocurrency regulations. Coinbase even attempted legal action to expedite the process. However, the recent rejection from the SEC has put an end to this expectation, triggering a new wave of legal disputes.

SEC Stands Firm: No Need for New Cryptocurrency Regime

SEC Chairman Gary Gensler firmly stated that the existing securities framework is sufficient to regulate cryptocurrency securities. The SEC believes that under current laws, it already has the necessary authority to regulate and enforce actions in the crypto space. Gensler emphasized the importance of SEC's discretion in setting regulatory priorities and reiterated SEC's commitment to its current approach.

Coinbase to Continue Fight in Court

Following the SEC's rejection, Coinbase's Chief Legal Officer Paul Grewal announced plans to challenge the SEC decision in court. Grewal criticized the SEC's move as dereliction of duty and advocated for clearer laws and industry collaboration.

Internal Disagreements at the SEC

Interestingly, SEC Commissioners Hester Peirce and Mark Uyeda expressed that they did not believe Coinbase's petition should have been rejected. They encouraged ongoing dialogue and specific rule changes to help the growth of the crypto industry within the United States, highlighting internal disagreements at the SEC.

Gensler's Rebuttal and Legislative Efforts

Gensler's rebuttal included pointing out that Coinbase's petition itself acknowledged SEC's authority over digital asset securities. He also mentioned an unnamed crypto broker complying with regulations through a special digital asset registration, indicating that the existing approach is sufficient.

Despite SEC's firm stance, crypto lobbyists in Washington continue to push for more concrete regulations, and recent legislative efforts suggest that Congress may soon intervene and play a more significant role in cryptocurrency regulation.