Cryptocurrency exchange Coinbase recently filed a lawsuit against the Securities and Exchange Commission (SEC), requesting that the court order the agency to answer to its demand for more precise cryptocurrency legislation.
In a petition for rulemaking provided to the SEC in July of last year, the exchange requested that the agency establish and implement regulations for securities backed by digital assets. A total of 50 specific questions were also asked in an effort to get “clarity and certainty regarding the regulatory treatment of digital asset securities.”
While a number of questions focus on subjects like asset custody and trading crypto asset securities on SEC-regulated exchanges, some of the queries centre on the SEC’s process for designating some tokens as securities.
Coinbase’s legal challenge was brought up because the SEC did not publicly respond to that petition, according to the company’s chief legal officer Paul Grewal in a blog post.
The majority of the crypto sector shares a sentiment that, because the industry is not currently covered by U.S. securities laws, new legislation is required to regulate it.
If the financial watchdog responds to the petition, it may reiterate remarks made by SEC Chairman Gary Gensler and state that it does not think new regulations are required. Gensler asserted that “regulations actually already exist” for the appropriate management of cryptocurrency under securities laws during a Senate hearing last month.
