In the latest update on Coinbase news regarding Coinbase vs SEC lawsuit, tensions have escalated as the regulatory agency upheld its decision to reject CEX’s decision for rulemaking.
This entered the scene after the SEC even opposed the Interlocutory Appeal for Coinbase.
Arguments Made By SEC In Opposition Of Coinbase
The dispute is all about Coinbase’s petition for the SEC to renovate existing security regulations and come up with a new regulatory framework, catering specifically to crypto asset securities.
This move has come amidst an exchange claiming that the current regulatory workspace is “unworkable” and has some difficulties in compliance. Hence, there’s a requirement for a more comprehensive approach.
However, the latest filing by the SEC clearly defended the existing regulatory framework with this piece of hard work continuing to effectively protect investors, maintain market integrity, and facilitate capital formation.
Not only this, but the Commission has also emphasized that courts have been frequently applying existing security laws to crypto asset securities. Arguments like the opposing objectives & ongoing regulatory actions are mentioned as a parameter of rejection.
One of the main arguments made forth by Coinbase was that rulemaking was necessary for fair notice, especially in view of the apparent change in the SEC’s authority over securities including cryptocurrency. The argument called for more specificity & clarity in regulatory guidelines.
However, in the battle, the SEC dismissed all of its claims, maintaining that there are no effects on the authority and that enforcement actions are distinct from the rulemaking process.
The SEC in its defense stated that the arguments provided were insufficient. However, the agency stated that the explanation provided by it was more than sufficient and in accordance with the Administrative Procedure Act. Further, they’ll seek “proper remedy” if the court dismisses their stance.
Suggested Read: No wonder to hear that Hong Kong Hashkey has challenged Coinbase, saying it will overtake it in the next 5 years. Woah, what a bold statement!
Interlocutory Appeal & SEC
Once again SEC has been criticized for its inconsistency by Paul Grewal, the Chief Legal Officer Of Coinbase. Not only did he focus on SEC’s opposition to Coinbase’s request but also this stance can be understood in the context of Coinbase’s Motion to Dismiss (MTD).
In opposition to the Interlocutory Appeal by Coinbase, the leader of SEC, Gary Gensler has argued that the court could reject the appeal as it is based on discrepancies as per a US Supreme Court case of 1946n opposition to Interlocutory Appeal by Coinbase, the leader of SEC, Gary Gensler has argued that the court could reject the appeal as it is based on discrepancies as per a US Supreme Court case of 1946. This case talks about the classification of assets as investment contracts.
The Howey Test
The conflict has its roots in the Howey Test which is a controversial aspect for crypto innovators. However, Grewal along with highlighting the SEC’s contradictory arguments also emphasized the importance of honesty between Coinbase and regulators.. He further urged, genuine dialogue, pointing out that there exists a disagreement even among the district judges of the same courthouse regarding the application of the Howey Test to digital assets.
That’s all about the clash!
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