Coinbase, a leading cryptocurrency exchange, has taken a notable step in challenging the United States Securities and Exchange Commission's (SEC) regulatory approach towards the crypto industry. In its appeal to the U.S. Court of Appeals on May 31, Coinbase urged the court to compel the SEC to establish fair rules for the crypto industry, stating that the agency is serious about eliminating crypto assets.

Coinbase Argues for Clear and Fair Rules

Coinbase argues that the SEC does not seem willing to sit down and create clear and fair rules, stating: "Giving the agency more opportunities to explain itself is both meaningless and absolutely undeserved." The exchange claims that the SEC has no duty to enable compliance with its own rules and believes the rules are sufficiently enforceable, as it has already taken legal action against many firms in the industry for violating them.

Coinbase Urges Court to Consider SEC Commission Members' Stance

Coinbase also urged the court not to rely solely on the SEC's word before reiterating the stance of other SEC Commission members who believe the agency is hindering the crypto asset industry and welcoming the demise of new technology. Hester Pierce, a pro-crypto SEC commission member, recently published a letter introducing a cross-border sandbox program experimenting with tokenized securities among blockchain firms in the U.S. and the U.K.

SEC's Lawsuit Against Coinbase

Meanwhile, Coinbase claimed that the SEC's rules might only pose challenges for a small segment of the industry, suggesting it is attempting to soften its harsh approach towards the crypto industry. SEC initiated the lawsuit against Coinbase in June 2023, alleging that Coinbase never registered as a broker, national securities exchange, or clearing agency and avoided disclosure plans for securities markets. Coinbase sought the dismissal of the case, but the SEC consistently opposed these efforts. Despite optimism from the crypto sector and legal experts about Coinbase's chances of dismissing the case, the lawsuit was not successful.

Coinbase's Fight for Fair Regulation

Coinbase's appeal to the U.S. Court of Appeals represents a significant step in the ongoing battle between the crypto industry and the SEC. The exchange's stance highlights the need for clear and fair rules that foster innovation while protecting investors. As the legal proceedings continue, the outcome of this case will have far-reaching implications for the future of cryptocurrency regulation in the United States.