Coinbase, a cryptocurrency exchange, claims that the United States Securities and Exchange Commission (SEC) will continue its enforcement-based regulation strategy in the cryptocurrency industry with the intention of stifling its growth. In a filing with the U.S Court of Appeals on May 31, Coinbase expressed its frustration with the SEC’s reluctance to establish clear and fair guidelines for the industry. The exchange argues that giving the agency more opportunities to explain itself would be futile and undeserved. Coinbase alleges that the SEC believes its rules are sufficient, as it has already taken legal action against several industry firms for non-compliance. The exchange also highlights the views of SEC Commissioner Hester Pierce, who believes that the agency’s approach is hindering the industry’s progress. Pierce recently proposed a cross-border sandbox program for blockchain firms in the U.S. and U.K. to experiment with tokenized securities. Coinbase further criticizes the SEC for downplaying the impact of its rules, claiming that they only pose challenges for a small portion of the industry. The SEC initiated a lawsuit against Coinbase in 2023, alleging that the exchange had not registered as a broker, national securities exchange, or clearing agency, thus evading securities market disclosure requirements. Coinbase has been attempting to have the case dismissed, but the SEC has consistently opposed its efforts. Despite optimism from the crypto industry and legal experts, the case has not been dismissed.
Coinbase claims the US SEC is determined to stifle the cryptocurrency industry.