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While crypto exchanges seek regulation, the SEC looks at punitive actions

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As tensions continue between the Securities and Exchange Commission (SEC) and crypto exchanges in the United States, Coinbase has emerged as a symbol of regulatory resistance to an unfair and highly flawed approach to overseeing Web3.

After months of tough talk from SEC Chair Gary Gensler (who has repeatedly said he views coin offerings on crypto exchanges as securities) and frosty interactions with Coinbase, the agency has reportedly opened an investigation. per According to the US-based crypto exchange this month Forbes.

It’s a bold move that has rocked the Web3 world

The move comes on the heels of a July complaint that the SEC filed in federal court that listed nine tokens offered on Coinbase as securities. Rather unhelpfully, the complaint does not specify why these particular tokens (including AMP, DDX, DFX, LCX, POWR, RGT, RLY, and XYO) differ from others offered on the exchange.

However, with the exception of Coinbase (and possibly Ripple, the company behind the XRP token), crypto exchanges and the projects behind many of the tokens under investigation have remained relatively quiet on the SEC’s recent moves.

“1930s Law Couldn’t Predict Crypto,” Coinbase tweeted The SEC issued the complaint on the same day it filed a petition with the regulatory agency to enact new and more modern securities rules that work for everyone.

In another July blog post by the company, Coinbase Chief Legal Officer Paul Grewal reiterated the platform’s position that “Coinbase does not list securities. End of story.” Grewal also said that Commodities Futures Trading Commission (CFTC) Commissioner Caroline de Pham commented that the investigations were “an interesting example of regulation by enforcement”.

It’s a position that appears to be shared by many, including SEC Commissioner Hester Pierce. It’s worth noting, however, that US Senators Cynthia Loomis and Kirsten Gillibrand have introduced a congressional bill that, if passed, would give the CTFC more authority than the SEC to regulate the crypto market, so Pham’s position is perhaps not surprising.

Regardless, it’s possible that exchanges and crypto coin projects are happy to let Coinbase, the posterchild of SEC pushback, take a more compliant approach to the agency’s investigation for now.

Several popular exchanges, including Coinbase, Kraken, and KuCoin, have not yet responded to requests for comment about the investigation and their views on them.

A spokesperson for Binance nft now offered their thoughts on the investigation, but said: “As a company, we are focused on providing a superior product for our users, including engaging collaboratively with authorities and regulators around the world. We take our legal obligations very seriously. We get inquiries from government agencies from time to time and we always cooperate with them.”

It would be difficult to render a more aggressive position, but it is probably the position that the company thinks it will simply take. Rather than risk legal action at the hands of the SEC, as Coinbase did when it tried (and failed) to launch its high-yield trading offering last year, it can prove it’s playing it safe by agreeing to offer fewer tokens on its platform for longer. Term strategy for exchange.

Crucially, whatever the competition between them, these exchanges want the same thing: to create clearer and more appropriate rules for organizations in the Web3 space. It’s hard to say how this will ultimately play out, as is how much damage Coinbase is willing to take before an answer emerges.



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