Coinbase Confronts SEC Over Enforcement by Regulation Approach
- As Paul Grewal points out, the current laws don’t apply to digital assets.
- Coinbase petitioned the SEC to adopt rules on digital asset securities last year.
Since the U.S. Securities and Exchange Commission needs to focus on effective regulations and recommendations relating to securities, rather than erroneous securities cases, Coinbase has submitted an amicus brief in the SEC v. Wahi insider trading case urging the court to dismiss the complaint.
According to a tweet sent by Coinbase’s chief legal officer Paul Grewal on March 14, it was revealed that Coinbase has submitted an amicus brief in SEC v. Wahi in favor of dismissing the erroneous litigation.
As Paul Grewal points out, the current laws don’t apply to digital assets, thus Coinbase petitioned the SEC to adopt rules on digital asset securities last year.
Adopting Appropriate Regulations
The SEC is preoccupied with frivolous litigation that “distort the legal definition of an investment contract beyond recognition” instead of focusing on adopting appropriate regulations or registration choices, as per Paul.
With Ishan Wahi’s guilty plea, Coinbase accepted the insider trading and wire fraud accusations brought by the U.S. Government, but it disputes the securities fraud allegations. Although the assets mentioned by Coinbase are not securities and the SEC is concentrating on what should be a criminal matter, Coinbase has urged the court to dismiss the action.
Separate amicus papers requesting the court to dismiss the action were also submitted in February by the Blockchain Association and the Chamber of Digital Commerce.
The U.S. Securities and Exchange Commission-led regulatory assault on cryptocurrencies has had a significant influence on the markets. However, the SEC continues to regulate the market for cryptocurrencies using antiquated standards designed to govern a very different kind of asset.
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