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The arrival of crypto winter has increased the demand for crypto regulations, but nothing substantial has been done thus far. SEC – Security Exchange Commission – is still not clear about the rules, which has pushed many cryptocurrency exchanges, including Coinbase, to question what their future might be.
But Coinbase has no intention of stopping any longer. Intending to force a resolution, Coinbase has filed an action against the commission in a United States Federal Court. The exchange’s request is a simple “yes or no” answer to the petition it filed in July 2022.
50 Specific Questions were asked in the Petition – And no Response so Far
It has already been noted that the Security Exchange Commission is not a big fan of cryptocurrencies and has been taking regressive measures that many say are a”halt the progress of cryptos” while proposing more regulations.
The result of this dichotomy is no clear regulation, and the entire cryptocurrency space is paying for it.
But in July 2022, shortly after the fall of LUNA and the arrival of crypto winter that continues to persist to this day, Coinbase petitioned and asked 50 specific questions regarding how certain assets are to be treated per regulations.
The questions were broad. But one of them was very specific since it harkens back to what the Security Exchange Commission has been trying to treat cryptocurrencies as – securities.
The question was about the basis on which the Commission classifies tokens as securities.
However, there has been no answer till now. SEC has not been able to provide any answer “within reasonable time”, according to Paul Grewal, Chief Legal Officer at Coinbase, and he has filed a court action against the commission. He has detailed it more in his recent tweet.
Today, we filed a narrow action in the U.S. Circuit Court to compel the SEC to respond “yes or no” to a rulemaking petition we filed with them last July asking them to provide regulatory guidance for the crypto industry. 1/4 https://t.co/rlsS1DIFfl
— paulgrewal.eth (@iampaulgrewal) April 25, 2023
The petition was filed nine months ago, and Coinbase has now grown impatient and is pushing to get an answer out of the SEC.
Grewal explained SEC’s apprehension towards answering these questions –
“It seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet. So the action Coinbase filed today simply asks the court to ask the SEC to share its decision.”
The Legal Officer explained that agencies must provide an answer after making up its mind, especially if the answer is no.
The Matter is of Utmost Importance – Paul Grewal
Paul Grewal further added that the matter is of utmost importance right now as recent turns of events, like the Wells Notice – which pointed to Coinbase facing SEC enforcement action for “potential violations of securities law” – has put the exchange’s future at stake.
Coinbase is not alone in this, other cryptocurrency exchanges are facing the same legal scrutiny. However, the issue is that SEC has failed to tell exchanges how these securities law applies to them.
That said, many exchanges aren’t up in arms against SEC like Coinbase. Kraken, a US-based cryptocurrency exchange, was the first to fold at the sight of legal action.
As a result, the exchange has stopped providing a staking-as-a-service program and has also paid a $30 million fine.
However, Kraken’s punishment was a move that even some of SEC’s own people didn’t approve of. SEC commissioner Hester Pierce labeled the commission’s conduct “an unfair way of regulating” and has slammed SEC for shutting down a program that served so many people.
I Would be Forming an Anti-Crypto Army – Elizabeth Warren
Regulatory bodies and exchanges have been butting heads for a long time. However, it has now been made clear that exchanges have fewer friends in the regulatory space than they previously thought.
SEC recently ordered Paxos to stop minting and issuing BUSD.
Elizabeth Warran, the Massachusetts Senator from the democratic party, is making going against crypto her rallying cry for her re-election campaign.
I’m in this fight to put our government on the side of working families. Join our re-election campaign today: https://t.co/KuZwvrwkqT pic.twitter.com/fCUcqE9PZM
— Elizabeth Warren (@ewarren) March 29, 2023
The US Going Against Crypto – Companies Contemplating Moving Elsewhere
As it has become apparent that the US is increasingly against cryptocurrencies, Coinbase, and multiple other cryptocurrency exchanges have signaled that they would be moving their base of operations elsewhere.
Coinbase has already received a license to operate in Bermuda and will launch a derivative exchange there soon.
All Eyes On The Wider Crypto Market
With Coinbase moving to another country to operate and Bitcoin stepping back from its $30k mark once again, people are now waiting for the arrival of the earnings report on May 4.
That report will tell people what the crypto market’s overall health is, and depending on what the findings are, we might see another bullish or bearish session for Bitcoin.
In the meantime, you must invest in cryptos that are not on any exchanges yet. These presale cryptos offer bigger gains and have larger upsides in the future.
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