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Coinbase Accuses SEC of Choking Crypto Sector with Enforcement Strategy

Coinbase Vs Sec

According to crypto exchange Coinbase, the United States Securities and Exchange Commission (SEC) will keep regulating the bitcoin sector with its “choking” purpose in mind by means of an enforcement strategy.

Coinbase’s Legal Battle with the SEC

“The SEC is serious about the destruction of digital assets,” Coinbase said in a May 31 petition with the U.S. Court of Appeals in its continuous attempt to compel the court to order the SEC to start implementing fair policies for the crypto business.

The agency, according to the conversation, does not appear eager to offer clear, equitable rules.

“Giving the agency more chances to explain itself is both useless and wonderfully undeserved,” it said.

Coinbase asserted that the SEC “has no duty” to make compliance with its regulations achievable, and the agency feels its standards are “workable enough” since it has taken legal action against numerous companies in the sector for breaching them.

The conversation also informed the court not to take its word for it before restating the position of other SEC Commissioners, who also feel that the SEC is hurting the digital asset business and encouraging the extinction of innovative technologies.

Hester Pierce, one of the most outspoken pro-crypto SEC commissioners, recently sent a letter advocating a cross-border sandbox program involving American and British blockchain companies testing tokenized securities.

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“One of the issues we have seen is people trying to visit the SEC in search of relief, but you know, you sort of come in and nothing happens. This would […] press the SEC’s hand a little bit,” Pierce remarked at a Consensus 2024 discussion.

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The SEC believes that its overly strict approach only leads to problems for certain individuals. Coinbase further pointed out that by asserting that its policies could only provide difficulties for a certain portion of the crypto market, the SEC has tried to offset its harsh attitude toward the sector.

Declaring that only a “small set of market participants” “may” encounter “compliance difficulties” under “discrete provisions” of current laws, the SEC seeks to diminish its repressive posture.

Alleging that Coinbase has never registered as a broker, national securities exchange, or clearing agency, therefore avoiding the disclosure system for securities markets, the SEC started action against Coinbase in June 2023.

Coinbase has tried to get the matter dropped, but the SEC has regularly turned down their efforts. It was not successful, despite hope from the crypto sector and legal professionals alike that Coinbase would get the matter dropped.

After attending a hearing, top Bloomberg litigation expert Elliott Stein reportedly projected a 70% likelihood of the exchange obtaining a complete dismissal in the complaint on January 21.

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