- Brian Armstrong said Coinbase would appeal the SEC’s petition denial to create crypto rules.
- According to Armstrong, the appeal will get the crypto industry closer to regulatory clarity.
- The SEC denied Coinbase’s petition, describing it as “Unwarranted.”
Coinbase CEO Brian Armstrong has expressed his company’s willingness to challenge the Securities and Exchange Commission’s (SEC) decision not to create clear rules for the crypto industry. In a post on X (formerly Twitter), Armstrong described the developing situation as a “nice small win,” saying that challenging the SEC’s decision would get the crypto industry one step closer to regulatory clarity.
Coinbase filed a petition in court on July 21, 2022, requesting the SEC to provide specific rules that would govern the crypto industry. In its letter of response, the SEC cited Coinbase’s petition, noting that it suggested the Commission engage in discretionary rulemaking of substantial scope to create a new regulatory framework for crypto asset securities.
The SEC noted that Coinbase’s petition did not include the text or the substance of any proposed rule, which is a requirement by the Commission’s rules of practice, among other reasons. Hence, after going through the required processes, the SEC denied the petition, describing it as “Unwarranted.”
In his post, Armstrong noted that since the SEC has come out to deny the petition, it allows Coinbase to challenge its response in court. According to the Coinbase CEO, doing so would help the industry to get closer to regulatory clarity. He categorically stated that the question is “Why doesn’t the SEC want to clarify outstanding regulatory questions for the crypto industry?”
The SEC has initiated several litigations against cryptocurrency companies and establishments, including Coinbase. In most cases, the SEC has singled out a particular crypto company or a small group of companies in regulation-related court cases. This approach by the SEC has left many crypto practitioners worried and confused over the unclear nature of the SEC’s regulation pattern.
Despite heavy criticism, the SEC appears unwilling to change its approach to regulating the crypto industry. According to its response, the Commission disagrees with Coinbase’s petition, which asserts that applying existing securities statutes and regulations is unworkable.
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