Coinbase and the SEC went head-to-head in federal court on Monday as the crypto exchange continues its push to force the regulator to establish new rules for the digital asset industry. The dispute has reached the US Court of Appeals for the Third Circuit after Coinbaseâs petition for rulemaking was denied by the SEC.
Coinbase claims the SEC has failed to provide clear guidelines for companies in the cryptocurrency space, despite consistently advising firms to "come in and register." Paul Grewal, Coinbaseâs chief legal officer, expressed frustration, stating that the SEC refuses to explain its denial while aggressively enforcing unclear rules on the industry. He made these comments following the court hearing on social media platform X.
The SEC argues that Coinbase is not above the law and that the current regulations are sufficient. SEC Chair Gary Gensler has repeatedly said that most digital tokens are securities and has encouraged issuers and exchanges to comply with existing laws. In a December 2023 statement, Gensler justified the denial of Coinbaseâs petition, saying the current framework already applies to digital assets.
Meanwhile, Coinbase and the SEC are also locked in a separate legal battle. In June 2023, the SEC sued Coinbase, accusing it of operating as an unregistered broker, exchange, and clearing agency. The regulator identified 13 cryptocurrencies available on Coinbase, including SOL, ADA, and MATIC, as securities. This case is still in the discovery phase.
As Coinbase pushes for a more defined regulatory framework, the SEC remains firm in its stance that digital assets fall under existing laws. This ongoing legal clash highlights the growing tension between regulators and the rapidly evolving crypto industry.