SEC Filed Back on Coinbase ‘Power Grab’ Allegations

In a new filing, the US Securities and Exchange Commission (SEC) has asked the court to reject Coinbase's petition to establish a new regulatory framework for crypto.

Coinbase In a March filing, he claimed the regulator “lacks the legal authority” to extend the existing security regime to crypto assets, is “plowing forward without congressional authorization” and is engaging in “a power grab through enforcement actions.” The crypto exchange argued that any decision on extending the current securities regime would have to be “enacted and implemented in future regulations.”

SEC lawyers rejected the argument that Coinbase's existing rules are “unworkable” and that a new regulatory framework should be developed “from the ground up”, in a filing with the US Third Circuit Court of Appeals on Friday.

The regulator argued that the “incremental approach” to applying the existing regulatory framework to crypto asset securities is reasonable and well within the Commission's decision.

In a tweet, Coinbase's chief legal officer, Paul Grewal, said the SEC's argument that the current registration process is “workable” is a “mistake” and that the exchange is “confident the court will see this for what it is.”

Coinbase and the SEC

The SEC and Coinbase sued the regulator in June 2023, alleging that it failed to register as an exchange, house and broker, offered these services to investors, and offered and sold unregistered securities. Service.

Coinbase has denied the allegations, arguing that tokens listed on the exchange do not qualify as securities under the terms of so-called “investment contracts.”

The exchange has followed an aggressive campaign of court filings and public statements to push back against the SEC's “regulation enforcement” behavior, calling for “new rules and regulations” to govern the crypto sector.

Coinbase has also begun lobbying crypto-friendly political candidates, donating $21.5 million to the Fairshake Super PAC. Earlier this month, Grewal tweeted that the PAC's support for the SEC's “litigation campaign” led to the election of pro-crypto candidates who “understand the importance of clear rules of the road.”

Despite Coinbase's best efforts, the SEC's allegations continue to mount. At the end of March, the federal judge overseeing the case decided that the regulator's arguments against the crypto exchange were mostly “persuasive” and should move forward, rejecting Coinbase's motion to dismiss the case entirely.