Coinbase Conflict: SEC Chairman’s Crypto Flip-Flop Challenged

John Deaton, the attorney for XRP holders, accuses the United States Securities and Exchange Commission (SEC) Chairman Gary Gensler of public misinformation. This comes amid the legal dispute between Coinbase Global Inc. and the SEC over cryptocurrencies.

Moreover, the dispute intensified with the SEC’s rejection of Coinbase’s rulemaking petition and the provision of three main justifications. The first is the incorporation of cryptocurrencies into the extant securities legislation. Second, how the SEC regulates the cryptocurrency securities markets and how crucial it is to preserve the Commission’s latitude in determining which rules to prioritize.

Deaton stated that Coinbase’s regulation proposal depends on the company’s conviction that the cryptocurrency ecosystem is distinct in reaction to the SEC’s ruling. Deaton claims this distinctiveness includes asset volatility and the legal classification of all assets as securities.

In opposition to this position, Deaton noted that Gensler had already stressed the unique characteristics of cryptocurrency in his congressional testimony earlier this year, saying that it is outside the Commission’s customary regulatory purview, resulting in a regulatory vacuum.

Furthermore, Deaton said that the SEC Chair’s stance had changed dramatically, pointing out the inconsistency between Gensler’s prior remarks and the SEC’s denial of Coinbase’s petition. He put this flip down to political motivations, citing Senator Elizabeth Warren’s backing as the impetus for Gensler’s position shift.

SEC’s Coinbase Clash Fuels Crypto Uncertainty

Moreover, this disagreement reflects the SEC’s erratic signals on cryptocurrencies. The Commission’s actions and the Chairman’s remarks send conflicting signals on their approach to the evolving cryptocurrency landscape. The regulatory body’s stance appears uncertain amid mixed indicators.

Furthermore, the SEC did not appeal its decision against Grayscale Investments in broader legal disputes. These disputes revolved around cryptocurrency securities and included Coinbase and Binance.

Grayscale’s effort to transform its Bitcoin Trust into a functional spot Exchange Traded Fund (ETF) is at the center of the lawsuit. This ruling increases the regulatory ambiguity around cryptocurrencies in the US.

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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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