Coinbase Alleges SEC Lacks ‘Any Powers to Regulate Digital Asset Exchanges’ in Recent Filing

Coinbase, 1 of the largest U.S.-based cryptocurrency exchanges, has filed a 177-page reply to the ailment introduced by the U.S. Securities and Exchange Commission (SEC), wherever the bureau states the institution was progressive successful the amerciable brokerage of securities. Coinbase alleges that the instauration lacks “any powers to regulate” cryptocurrency exchanges and that this enforcement enactment “offends owed process and the law separation of powers.”

Coinbase Contests SEC Powers to Regulate Cryptocurrency Exchanges

Paul Grewal, CLO of Coinbase, the largest U.S.-based cryptocurrency exchange, announced the filing of an reply to the complaint presented by the U.S. Securities and Exchange Commission (SEC), wherever the instauration accuses the Coinbase of unregistered securities brokerage.

In the 177-page document, Coinbase explains that successful April 2021, the SEC approved its registration to go public done an IPO connected Nasdaq, “allowing Coinbase’s shares to beryllium sold to millions of retail and organization investors.” However, the caller filing of this enforcement enactment against the speech contradicts the anterior support of its concern model.

Coinbase criticizes the newfound presumption of the instauration regarding cryptocurrency exchanges, stating that:

No statute enacted since April 2021 gives the SEC immoderate powers to modulate integer plus exchanges, overmuch little retroactively. The lone alteration is successful the SEC’s presumption regarding its powers.

Furthermore, the filing claims that this enforcement action, based connected the SEC’s alteration of face, “offends owed process and the law separation of powers.”

Gensler vs. Gensler

The papers besides presents a timeline of however the views of SEC Chair Gary Gensler changed connected the SEC’s faculties successful the cryptocurrency space. Coinbase explains that successful May 2021, Gensler testified earlier Congress stating the SEC “lacked statutory authorization to modulate businesses similar Coinbase,” putting the responsibilities of this task connected Congress, citing a “regulatory gap.”

However, Gensler’s positions changed implicit time, and according to Coinbase, by the extremity of 2022, helium stated: “I consciousness that we person capable authority, I truly do, successful this space,” for requiring crypto companies to registry arsenic securities exchanges.

About this, Coinbase’s filing declares:

The SEC besides present asserts the authorization to extract punitive retroactive penalties from companies for nonaccomplishment to admit powers its ain Chair was disclaiming 2 years ago.

Coinbase concluded that adjacent if the SEC’s changes regarding securities were “colorable,” the major questions doctrine, a U.S. ineligible rule that states courts volition presume that Congress does not delegate to enforcement agencies issues of large governmental oregon economical significance, would necessitate courts to cull this construction.

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