Coinbase and the SEC locked horns in a Philadelphia federal appeals court on Monday, with the cryptocurrency exchange pushing for clearer rules for digital assets. The dispute stems from Coinbase’s 2022 petition urging the SEC to outline when digital assets are considered securities and to create a new regulatory framework for cryptocurrencies.
After the SEC rejected the petition in December 2023, stating current regulations suffice, Coinbase sued, arguing that the regulator’s stance makes it impossible for the exchange to comply with US laws. Coinbase’s lawyer, Eugene Scalia, criticised the SEC’s lack of guidance, calling it a roadblock to progress.
The SEC’s lawyer, Ezekiel Hill, countered that the agency isn’t obligated to create new rules tailored to specific industries, arguing that existing laws should govern the crypto sector. The three judges questioned why cryptocurrency hasn’t been given more attention by the regulator, indicating the complexity of the ongoing regulatory tug-of-war.
The broader debate highlights the crypto industry’s belief that it operates in a regulatory grey area and requires new legislation, as Coinbase fights the SEC’s classification of most crypto tokens as securities in a separate case.
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