The Securities and Exchange Commission (SEC) has rebuffed U.S. crypto exchange Coinbase’s formal request for specialized regulations for digital assets, deeming such rules “unwarranted.” Coinbase had sought a comprehensive set of regulations through a petition, but SEC Chair Gary Gensler, in a statement, asserted that the existing securities regime effectively governs crypto asset securities. Gensler highlighted the SEC’s authority in current laws, ongoing rule proposals to regulate crypto businesses, and the enforcement division’s ability to address misconduct.
Coinbase, facing SEC legal action for being an unregistered securities exchange, had urged the agency in 2022 to formulate tailored rules. Despite the denial, Coinbase’s Chief Legal Officer, Paul Grewal, announced plans to challenge the SEC’s decision in court, criticizing it as an “abdication of its duty.” Commissioners Hester Peirce and Mark Uyeda opposed the denial, expressing disappointment in the SEC’s reluctance to host crucial conversations on crypto regulations.
Grewal emphasized the need for collaboration in crafting beneficial laws, with a footnote in Gensler’s statement acknowledging the SEC’s oversight of “digital asset securities.” Gensler also pointed out a crypto broker’s use of a special digital assets registration, suggesting its viability.
While crypto lobbyists seek industry-specific regulations, legislative efforts in Congress this year have yet to yield results. Despite the SEC’s resistance to tailored rules, the Financial Stability Oversight Council, including Gensler, concluded in its annual report that congressional intervention is necessary for crypto regulations.