Coinbase Challenges SEC, Proposes New Framework for Crypto Regulation

Crypto regulation in the U.S. has been a tangled mess, with unclear rules leaving businesses and investors in limbo. Now, Coinbase is stepping up, offering a bold new framework for the SEC to follow. The exchange wants clear rules that separate digital assets from traditional securities and is urging Congress to take the lead.

But will lawmakers finally step in, or will the confusion continue? Here’s what Coinbase is proposing.

SEC’s Approach Creates Confusion

SEC Commissioner hester peirce hester peirce Hester Peirce is the Commissioner of the SEC. She is known for formulating cryptocurrency regulations in the US. Hester is known as 'Crypto Mom' because she supports balanced policies that facilitate innovation and protect investors. She is also a professional lawyer and is associated with the Republican Party. With a strong background in law and economics, Hester has played a key role in creating clear regulatory frameworks for digital assets. She works closely with the Trump government and has promised clear and fair rules and regulations for cryptocurrency exchanges and blockchain projects. Quick Facts Full Name Hester Maria Peirce Birth 1970, Ohio, US Nationality American Education Case Western Reserve University, Yale University Marital Status Unmarried Net worth To be updated Peirce provides insightful directions on securities law as it applies to blockchain technology, bridging the gap between regulatory oversight and emerging crypto innovations. Her contributions continue to influence digital finance. Her work remains vital in today's digital economy. Hester Peirce  - A Career Timeline 2018: Appointed SEC Commissioner, advocating balanced crypto regulation and innovation. 2019: Championed clear digital asset frameworks to protect investors and promote market transparency. 2020: Influenced key blockchain policy discussions and integrated crypto-friendly securities guidelines. 2021: Advanced regulatory clarity for decentralized finance, emphasizing fair market practices. 2022: Recognized as "Crypto Mom" for her leading role in shaping digital asset oversight. Awards & Recognization of Hester Peirce Year Recognizations Description 2018 Emerging Regulatory Leader Blockchain News - For her balanced approach to crypto regulation. 2019 Digital Finance Advocate Award By Crypto Briefing for developing innovative policies in digital finance. 2020 Crypto Regulation Visionary Awarded by Forbes for her forward-thinking stance on overseeing digital asset markets. 2021 50 over 50 Forbes list For her contributions to investment policies. 2022 "Crypto Mom" Recognition By Financial Times for her influential role in guiding the crypto regulatory landscape. Useful Links to Connect With Hester Peirce Platform Links X (formerly Twitter) Hester Peirce (@HesterPeirce) / X LinkedIn profile https://www.linkedin.com/in/hester-peirce SEC commissioner profile https://www.sec.gov/commissioner/hpeirce EntrepreneurInvestorFinanceCrypto and Blockchain Expert recently invited input from the crypto industry on regulations, and Coinbase responded with a detailed roadmap. The exchange argues that the SEC’s current approach creates confusion, making it difficult for businesses and investors to navigate the industry.

Faryar Shirzad, Coinbase’s Chief Policy Officer, believes a well-structured and transparent framework would provide certainty for developers, clear rules for businesses, and strong protections for investors.

Ripple’s Win is a Win for All

Shirzad praised Ripple for securing a major legal win against the SEC, congratulating CEO Brad Garlinghouse and legal head Stuart Alderoty for standing their ground. He highlighted that the SEC’s decision to drop its appeal confirms an important legal point—crypto tokens themselves are not investment contracts.

He also criticized former SEC Chair gary gensler gary gensler Gary Gensler is the chairman of the U.S. Securities and Exchange Commission (SEC). His studies in finance and blockchain at MIT have helped him develop U.S. cryptocurrency regulations and policies. Quick Facts Full name Gary Scott Gensler Birth 18-10-1957, Baltimore, Maryland, United States Nationality American Education MBA from the University of Pennsylvania Marital status Married to Francesca Danieli (1986-2006) Net worth Estimated $100 million   Gensler has advocated for enhanced supervision of digital assets, seeking to regulate cryptocurrencies similar to securities. His work at the SEC has focused on safeguarding investors, regulating crypto exchanges, and establishing stablecoin policies.   Gary Gensler - Career Highlights 1997 – Became Assistant Secretary of the Treasury. 2009 – Led CFTC, regulating financial derivatives post-2008 crisis. 2018 – Taught blockchain and crypto at MIT. 2021 – Appointed SEC Chairman, focusing on crypto regulations. 2022 – Proposed stricter rules for crypto exchanges. 2023 – Took legal action against major crypto firms. 2024 – Advocated for stronger stablecoin and DeFi regulations.   Gary has collaborated with multiple lawmakers in formulating crypto policies. Even with disagreements with crypto investors regarding crypto policies, he continues to be a key player in the changing dynamic between regulatory frameworks and blockchain advancement.   Awards & Recognitions of Gary Gensler Year Institution  Description 2009 U.S. Treasury Financial Regulation Leader 2018 MIT Blockchain & Crypto Educator 2021 SEC SEC Chairman Overseeing Crypto Policies 2023 Bloomberg Most Influential Regulator in Crypto 2024 Forbes Top Policy Maker in Digital Assets   Useful Links to Connect With Gary Gensler Platform Link X (formerly Twitter) twitter.com/GaryGensler CFTC website Chairman Gary Gensler   Chairman for misleading the public on this issue for years, stating that Ripple’s fight has helped bring much-needed clarity to the industry.

Time for Congress to Step In

With uncertainty still hanging over crypto regulation, Shirzad insists it’s time for Congress to step in and establish clear rules. He credited Ripple for pushing the law forward and helping define how digital assets should be regulated.

In his blog post, Shirzad also addressed a key issue – the SEC’s classification of digital assets. Coinbase argues that cryptocurrencies that don’t represent ownership in a business should be treated as commodities, not securities. This distinction is crucial because it would allow financial markets to integrate blockchain-based assets more easily, improving liquidity and efficiency.

Coinbase Challenges SEC’s View on Crypto Trading

Coinbase is also pushing back against the SEC’s claim that secondary market sales of digital assets should be treated as securities transactions. The exchange argues that once a crypto asset is in circulation, its trades should not be regulated as securities. Removing these restrictions would allow crypto assets to move more freely in the market.

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A Solid Vision for Growth

Coinbase believes that crypto regulations shouldn’t be left solely to the SEC. Instead, it wants Congress to set the foundation for how digital assets are governed. The exchange argues that lawmakers, not regulators, should define the industry’s rules and remove the uncertainty that is slowing down innovation.

Beyond defining crypto assets, Coinbase is also pushing for policies that support the growth of tokenized securities. It suggests targeted rule changes that align with blockchain technology, unlocking new financial opportunities and encouraging innovation in traditional markets.

Shirzad believes addressing these key regulatory issues will not only provide clarity but also accelerate the adoption of blockchain-based finance. A well-defined framework, he argues, will help position the U.S. as a leader in the crypto space – promoting innovation while ensuring investor protection.

If the past few years have proven anything, it’s that crypto won’t fit into outdated rules – so maybe it’s time the rules caught up.

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