cryptonews.net
By initiating a limited action in federal court to force the SEC to respond to their pending regulation petition, Coinbase has taken a significant step toward achieving regulatory clarification for the cryptocurrency business.
This certainty would allow the cryptocurrency industry to function more effectively according tto the firm. The process of developing rules is very important because it enables government entities to solicit feedback from the general public and to create positions that may later be debated in legal settings. In accordance with the law, the SEC is obligated to respond to Coinbase's rulemaking petition within a reasonable amount of time; if the response is negative, Coinbase has the legal right to contest the decision.
The SEC has not yet made its judgment public, despite the fact that it seems to have opted to deny the petition submitted by Coinbase. As a consequence of this, Coinbase has decided to take legal action in the hopes of compelling the SEC to disclose its conclusion, which the SEC is obligated to do by law. Coinbase recognizes the importance of having legal certainty in the cryptocurrency industry. Coinbase also recognizes that the regulation process is a crucial step in educating the general public about the activities in which they may and cannot participate.
Coinbase recognizes its commitment to its industry, customers, shareholders, and employees to continue to seek regulatory clarity in the US until it is gained. Coinbase will continue to pursue regulatory clarification in the US until it is reached.
Coinbase is of the opinion that the cryptocurrency sector needs regulatory clarity as soon as possible. In spite of the fact that they may be subject to regulatory enforcement proceedings by the SEC, Coinbase and other cryptocurrency firms have not been advised of the SEC's interpretation of how the law pertains to their own operations. Coinbase is of the opinion that regulations are necessary for the industry and will pursue every possible avenue in order to gain clarity. The legal challenge is a very modest but still important component of their demand for more clear restrictions regarding road use.
According to Paul Grewal, authorities in the cryptocurrency industry lack clarity, and the cryptocurrency sector needs clear standards and norms to follow that are intended for a new technology. Gary Gensler hesitated to respond when he was asked if Ether is a security or a commodity. His refusal to answer suggests that even he is confused of what constitutes a security and what constitutes a commodity.
US’s current regulatory state
This move by Coinbase comes at a time when the regulatory environment in the United States seems to be becoming more stringent on a daily basis. The SEC is actively investigating a number of exchanges, including Coinbase itself as one of its targets. Regarding Coinbase's staking services, which the regulator considers to be a security, the regulator has issued a "wells notice," which Coinbase has received. Coinbase, on the other hand, has promised to defend its staking services, even if, in their view, these services do not satisfy the criteria for staking.
The Kraken company itself is being investigated by the watchdog in relation to its staking services, thus it is subject to the same rod as everyone else. The CFTC has taken legal action against the company Binance and its CEO CZ, accusing both of engaging in fraudulent market operations. Binance is the most recent exchange to get involved in this ongoing issue.
However, UK’s financial watchdog, FCA, is seeking help from crypto entities in creating a cryp[to regulatory framework, an action which US watchdogs deem wrong as they claim that this is counter to the approach pursued by our neighbors to the north in the United States. U.S. cryptocurrency industry workers claim that local financial authorities are utilizing enforcement actions to strangle the industry rather than collaborating with the leaders of related businesses to develop appropriate regulations.