The US Securities and Exchange Commission on Friday denied a petition by Coinbase Global seeking new rules from the agency for the digital asset sector, which the country's largest crypto exchange said it plans to challenge in court.
The five-member commission, in a 3-2 vote, said it would not
propose new rules because it fundamentally disagreed that current regulations
are "unworkable" for the crypto sphere, as Coinbase has argued. The
firm later notified an appeals court that it plans to seek judicial review of
the SEC's decision.
The dispute was the latest in a broader tug-of-war between
the crypto sector and the top U.S. markets regulator, which has repeatedly said
most crypto tokens are securities and subject to its jurisdiction. The agency
has sued several crypto companies, including Coinbase, for listing and trading
crypto tokens which it says should be registered as securities.
"Existing laws and regulations apply to the crypto
securities markets," SEC Chair Gary Gensler said in a separate statement
supporting the decision.
Coinbase disputed that assertion.
"No one looking fairly at our industry thinks the law
is clear or that there isn't more work to do," chief legal officer Paul
Grewal said in a statement. "We should be working together to create laws
and rules that will benefit consumers and US innovation".
Shortly thereafter, Coinbase notified a federal court of
appeals in Philadelphia of its plans to seek review of the SEC's denial.
In 2022, the company pressed the SEC to create a bespoke set
of rules for the crypto sector, arguing that existing U.S. securities laws are
inadequate. In April, Coinbase appealed to a judge to force the SEC to respond
to the petition.
The court said it would not force the agency to act, given
the SEC had said it would respond to Coinbase's petition.
Crypto firms have said they want a clearer idea of when the
SEC views a digital asset to be a security.
In his statement on Friday, Gensler argued that in asking
the SEC to write rules, Coinbase had acknowledged the SEC's authority over the
crypto sector, something the crypto exchange has refuted in the past.
Republican SEC Commissioners Hester Peirce and Mark Uyeda
said in a joint statement that they disagreed with the decision.
"In our view, the Petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator," they said. © Reuters