- Coinbase has filed a petition requesting the Securities and Exchange Commission to start rulemaking on digital asset securities.
- Coinbase states that existing rules for traditional securities do not work for digital assets.
- The exchange requests the SEC to develop a workable regulatory framework guided by formal procedures and public notice-and-comment processes rather than arbitrary enforcement.
- Coinbase’s petition comes on the same day the SEC classified nine tokens as securities in a petition against a former exchange employee accused of insider trading.
The US Risks Falling Behind in Digital Asset Innovation – Coinbase’s Chief Policy Officer.
According to Coinbase’s Chief Policy Officer, Faryar Shirzad, there has been tremendous growth in the digital asset industry in recent years. However, and 13 years after bitcoin was introduced, there ‘is still no meaningful crypto securities market in the United States.’
He adds that traditional securities rules put in place in 1933 and 1934 do not work for digitally native instruments. As a result, the United States risks falling behind in digital asset innovation.
The consequence is that the United States is falling behind in digital asset innovation. Most of the digital assets traded today have the characteristics of commodities, and in many instances, were specifically designed to avoid the securities laws.
In other words, as the crypto market develops, it is deliberately steering clear of the securities market — one of the principal financial markets in the United States.
Coinbase is Asking the SEC to Start a Process for Public Input into the SEC’s Work on Crypto.
Consequently, Coinbase has requested the SEC ‘to start a process where the public and key stakeholders can transparently provide input into the agency’s work on crypto.’ He adds:
Crypto represents the next wave of innovation within the markets themselves — and whatever country encourages that innovation while also keeping investors safe will reap enormous benefits.
We need the SEC to once again write the rules that will unleash the potential of U.S. capital markets, this time fueled by the benefits provided by crypto.
The SEC Has Just Classified 9 Digital Assets as Securities in Complaint Against Former Coinbase Employee Accused of Insider Trading.
Coinbase’s petition for an all-inclusive approach toward crypto asset security rule-making comes on the same day a former employee at the exchange was charged with insider trading. The SEC has also filed a complaint against the individual, his brother, and his friend, accused of illegally using confidential information on token listings to maximize their trading profits.
The complaint by the SEC goes as far as classifying nine digital tokens related to insider trading as crypto asset securities.