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While the EU moves forward with crypto legislation, Coinbase claims the US is lacking clear regulations to make a functioning digital asset securities market.
Crypto exchange Coinbase has taken legal action against a US regulator to receive clarity around digital assets being identified as securities.
The exchange has filed an action in US federal court to compel the Securities and Exchange Commission (SEC) to respond to a 2022 petition.
This petition called for the SEC to adopt rules to govern the regulation of securities and to “identify which digital assets are securities”.
The petition claims that the US does not have a functioning market in digital asset securities due to “the lack of a clear and workable regulatory regime”.
“Coinbase does not ask the court to instruct the agency how to respond,” the company said in its filing. “It simply requests that the court order the SEC to respond at all.”
The petition claims there is a lack of clarity to determine whether a digital asset is a security, along with requirements that are “fundamentally incompatible with the operation of digital asset securities”.
Coinbase chief legal officer Paul Grewal claims more than 1,700 entities and individuals have submitted comments to this petition “echoing the request for clarity”.
“From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition,” Grewal said in a blog post. “But they haven’t told the public yet. So the action Coinbase filed today simply asks the court to ask the SEC to share its decision.”
The confusion around digital asset securities in the US appears to have impacted other crypto exchanges. Last week, the SEC claimed Bittrex had been operating as an “unregistered national securities exchange, broker and clearing agency”.
Bittrex claimed that for five years, it asked the SEC to provide notice of “specific conduct that it thought violated the federal securities laws” but received no response.
The EU, meanwhile, made a significant step last week in its efforts to govern and safeguard the crypto industry. The EU Parliament voted overwhelmingly in favour of the Markets in Crypto Assets (MiCA), which creates a set of common rules around the supervision of crypto assets and cryptocurrencies.
The MiCA legislation also creates new rules on consumer protection, market manipulation, financial crime and environmental safeguards.
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