Crypto Chaos: Coinbase Blasts SEC for Arbitrary Actions

In today's news article, Coinmooner is covering a big scandal between the world's top crypto exchange, Coinbase, which ranks second in terms of traffic, liquidity, and trading volumes, and the SEC - a US government agency overseeing securities markets.

The scandal revolves around Coinbase's actions. They filed a lawsuit in the US Appeals Court against the SEC after it refused to develop rules for the crypto industry. The Commission's accusation against the Exchange for selling unregistered securities in the Ethereum (ETH) staking service and managing an illegal exchange where securities are listed has also had a negative impact. Coinbase believes that the SEC's actions are arbitrary and do not establish clear standards. Overall, the company's lawyers argue that the SEC demands compliance with irrelevant securities norms from the crypto industry. This conflict has sparked outrage and drawn attention to the regulatory issues in the cryptocurrency market among many industry users.

According to Coinbase's Chief Legal Officer, Paul Grewal, the SEC acted "whimsically and arbitrarily" by refusing to respond to the exchange's petition. In general, Coinbase claims that the regulator's refusal violates federal law.

Even if the SEC believes it can lawfully assert new authority over digital assets today (it can’t), it must explain why in a rulemaking process and give the public a chance to understand and challenge that view. That hasn’t happened here, and yet it’s what the law requires.

© Coinbase's Chief Legal Officer, Paul Grewal

Coinmooner, has looked closely at the SEC's refusal to address Coinbase's statement in December 2023. But it's important to note that Coinbase first made its statement back in 2022. After a lengthy legal battle, the court ordered the regulator to review it. However, in 2023, it took the SEC a year and a half, plus the court's decision, to finally consider and reject the petition. Such a delay seems excessively long for the fast-paced cryptocurrency market.

In 2023, SEC Chairman Gary Gensler disagreed with Coinbase's claim that it couldn't identify cryptocurrency issuers. He believes that issuers include official companies and various individuals and entities.

The situation is becoming more tense, with Coinbase seemingly adding fuel to the fire. For example, Greval also shared an excerpt from Coinbase documents confirming that in 2018, the SEC didn't classify cryptocurrencies as securities. This is significant given today's circumstances.

The Coinmooner team will continue to monitor this event and report all the details to our readers. In 2023, the SEC became more active, often punishing many crypto platforms, decentralized and centralized exchanges, and paying attention to various projects and famous figures in the Web3 industry. However, besides all this, the SEC itself was suspected of regulatory manipulation, notably with a fake tweet from the SEC that rocked the crypto world and wiped out $90 million, although according to SEC representatives, it was a hacked account. You can read more about it here "Crypto Chaos: The False Tweet That Shook the SEC and Wiped Out $90 Million ". We also want to remind our readers that it's important always thoroughly to analyze any news and verify it from multiple sources. Additionally, we urge you to always use cutting-edge security methods in the Web3 industry to safeguard your finances.