Coinbase Global, the biggest cryptocurrency exchange in the nation, filed a petition with the U.S. Securities and Exchange Commission asking for new regulations for the digital asset industry. The petition was denied.
Siding with Coinbase’s argument that the current regulations are “unworkable” for the cryptocurrency industry, the five-member body decided, by a vote of 3-2, that it would not put forth new rules.
The letter was the most recent in a longer-running battle between the leading U.S. markets regulator and the cryptocurrency industry. The regulator has maintained that the majority of cryptocurrency tokens are securities and fall under its purview. The agency has filed lawsuits against a number of cryptocurrency businesses, including Coinbase, for listing and dealing in tokens that, in its opinion, ought to be considered securities.
In a separate statement endorsing the decision, SEC Chair Gary Gensler stated that the crypto securities markets are subject to current laws and regulations.
The company argued that the current U.S. securities laws are insufficient and pushed the SEC to develop a special set of regulations for the cryptocurrency industry in 2022. Coinbase filed an appeal with a judge in April to compel the SEC to reply to the petition.
Given that the SEC had stated it would reply to Coinbase’s petition, the court ruled that it would not compel the agency to take any action.
In his statement, Gensler maintained that Coinbase had acknowledged the SEC’s jurisdiction over the cryptocurrency industry by asking the agency to draft regulations—an assertion the cryptocurrency exchange has previously denied.
Hester Peirce and Mark Uyeda, two Republican commissioners on the SEC, expressed their disagreement with the ruling in a joint statement. They believe that the Petition brings up important issues brought about by new technologies and other innovations, and responding to these issues is a fundamental component of being an accountable regulator.
