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Coinbase Challenges SEC, Proposes New Framework for Crypto Regulation

Published by
Zafar Naik

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 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 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.

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.

Zafar Naik

Zafar is a seasoned crypto and blockchain news writer with four years of experience. Known for accuracy, in-depth analysis, and a clear, engaging style, Zafar actively participates in blockchain communities. Beyond writing, Zafar enjoys trading and exploring the latest trends in the crypto market.

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