The cryptocurrency industry is putting pressure on the U.S. Securities and Exchange Commission (SEC) to establish clear rules and regulations for the cryptocurrency market.
Major players including Paradigm, the Crypto Council for Innovation and the U.S. Chamber of Commerce argued with the district court to uphold Coinbase’s appeal to the SEC to provide specific guidance for the cryptocurrency industry.
Crypto Industry Challenges SEC’s Regulatory Approach
in court filing Paradigm’s filing on Monday expressed interest in the case, highlighting the SEC’s continued refusal to issue final rules and guidance regarding cryptocurrencies, tokens and related trading platforms.
Paradigms’ legal team explained: enforcement action In the cryptocurrency space, the SEC has not adequately explained the legal basis for its authority, creating uncertainty for entrepreneurs and impeding the availability of judicial review.
The Crypto Council for Innovation and other industry stakeholders argue that the SEC’s current approach contributes to the ambiguity surrounding cryptocurrencies and hinders the industry’s progress. Additionally, the Crypto Council notes that the SEC’s current regulatory frameworkDesigned for traditional securities, it does not address the unique characteristics of cryptocurrency assets.
Unlike securities, cryptocurrency assets are not dependent on a centralized issuer and operate within decentralized networks and communities. As a result, the SEC’s focus on requiring disclosure from centralized issuers does not provide digital asset holders with the critical information they need.
The filing states that the current framework imposes unnecessary intermediaries that hinder the disintermediation nature of cryptocurrency trading platforms.
Paradigm also notes that several cryptocurrency projects have attempted to comply with SEC registration requirements but have encountered difficulties. important task. The SEC initially recommended using Form 10 for registration, but later abandoned this approach, causing projects that followed it to fail or stall.
Other projects have explored using the “Reg A” registration exemption, but this too has proven “unfeasible” when applied to crypto assets, according to the Crypto Council. The company also argues that existing regulatory frameworks designed for traditional securities do not address the unique characteristics and requirements of the cryptocurrency industry.
Coinbase urges clear guidance from SEC
Coinbase has petitioned the SEC to create clear guidance on when cryptocurrency assets should be classified as securities. Coinbase argued that an industry worth more than $2 trillion needs regulatory oversight and that companies want to adhere to a well-defined framework.
Court documents state: regulatory compliance Predictability is necessary, and Coinbase’s petition seeks to establish a stable balance between regulation and innovation.
Paradigm concluded its argument by asserting that the SEC’s current regulatory-enforcement approach, which penalizes attempts at compliance, does not provide the stability the industry needs to thrive. The paper concludes by asserting:
The court should overrule the agency’s denial of Coinbase’s rulemaking petition and remand with instructions for the SEC to participate in rulemaking.
Ultimately, the cryptocurrency industry, represented by Paradigm, the Crypto Council for Innovation, and other stakeholders, submitted a Create rules For the cryptocurrency sector.
The need for clear guidance stems from the SEC’s continued refusal to provide comprehensive rules and guidance, hindering the growth and development of the industry.
Coinbase’s stock, which trades under the ticker COIN, is currently valued at $228, reflecting a decline of more than 4% in the past 24 hours. This decline closely mirrors the price movement of Bitcoin (BTC). Bitcoin fell 5%, reaching a price of $64,200 at the time of writing.
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