According to ChainCatcher, Paul Grewal, Chief Legal Officer of Coinbase, posted on social media that Coinbase submitted an objection to the U.S. Securities and Exchange Commission (SEC) today regarding its proposal to expand the definition of "exchange". The SEC's proposal lacks key analysis, is based on unreasonable assumptions, does not prove the existence of problems that require regulation, and seriously exaggerates the benefits of the proposal. The following are the main concerns:
Lack of Economic Analysis: The SEC failed to gather basic information or conduct an economic analysis to assess the proposal’s impact on decentralized exchanges (DEXs), but nonetheless advanced its unreasonable assumptions;
Potential Impact on DEXs: Coinbase emphasized that the SEC should not extend the proposal to DEXs because it could have a significant impact on the millions of Americans who use digital assets and could harm innovation in the growing DEX market.
Assuming the existence of a problem: The SEC starts with the assumption that there is a problem in the industry that needs to be corrected, but fails to prove that the problem exists.
Coinbase believes that this is not the right approach for rulemaking and that the proposal should at least be withdrawn and amended. Ongoing dialogue with the SEC: Coinbase appreciates the SEC’s careful consideration of its comments and looks forward to further discussions on this important topic.
