The U.S. Securities and Exchange Commission (SEC) is rejecting Coinbase’s petition to create a new regulatory framework for digital assets.
In a new letter to Coinbase, the regulatory agency says that it disagrees with the crypto exchange’s assessment that securities laws shouldn’t apply to the digital assets industry.
“The Commission has carefully considered that recommendation, as well as the Petition and comment letters. After such consideration, and in the exercise of its broad discretion to set its rulemaking agenda, the Commission concludes that the requested rulemaking is currently unwarranted and denies the petition.
The Commission disagrees with the petition’s assertion that application of existing securities statutes and regulations to crypto asset securities, issuers of those securities, and intermediaries in the trading, settlement, and custody of those securities is unworkable.”
In his own statement, SEC Chairman Gary Gensler agreed with the SEC’s assessment, saying that there’s no need for crypto-specific laws as securities laws already protect consumers.
“I was pleased to support the Commission’s decision for three reasons. First, existing laws and regulations apply to the crypto securities markets. Second, the SEC addresses the crypto securities markets through rulemaking as well. Third, it is important to maintain Commission discretion in setting its own rulemaking priorities.
Existing laws and regulations already apply to the crypto securities markets. There is nothing about the crypto securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws.”
However, two of the SEC’s commissioners – Hester Peirce and Mark Uyeda – disagree with the SEC’s response, saying that virtual currencies need their own set of laws.
“We disagree with the Commission’s decision. We acknowledge that the Commission has broad discretion to set the timing and priorities of its rulemaking agenda. In our view, the petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator.
Any exploration of these issues should include public roundtables, concept releases, and requests for comment, which would afford us the opportunity to hear from a wide range of market participants and other interested parties. Then, using what has been learned, the Commission could issue guidance or engage in rulemaking as needed.”
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