The U.S. financial market watchdog has refused to create rules specific to cryptocurrencies, as requested by crypto exchange Coinbase.
The US financial markets watchdog, the SEC, on Friday rejected a request by cryptocurrency exchange platform Coinbase to create specific rules to adapt its texts to the crypto-asset sector.
The SEC said in a letter to Coinbase that it “disagrees” with Coinbase’s claims that it considered regulations, exchanges and escrow standards to be “inapplicable” to crypto-assets. In addition, the SEC criticizes Coinbase for submitting the request without offering “text or substance” for the new rules requested.
“Rather, it contains a summary of the subject and more than 100 questions that the applicant considers important to consider,” the committee continues.
Protection
SEC Chairman Gary Gensler added in a statement that “there is nothing in the cryptographic securities markets to suggest that investors or issuers have less protection under the securities laws.”
“Existing laws and regulations already apply to the crypto-asset market,” he insisted. For several years, the SEC has argued that some digital currencies are financial securities, like stocks or bonds, and therefore subject to its oversight as an investment product, a highly contested view.
The rejection comes as Coinbase will have to defend itself in a separate case against lawsuits from the SEC, which accuses it of failing to register with exchange authorities. Coinbase official Paul Grewal, chief legal officer, responded in a tweet that the platform will appeal the decision in court.