The chief legal officer of US cryptocurrency firm Coinbase, Paul Grewal, has opposed the SEC's proposed rule changes that could change what an exchange is and how digital assets are regulated.
In a June 14 Twitter thread, Grewal said the SEC proposal "attempts to install a square peg in a round hole" and is "too many flawed in process and substance to move forward." He was referring to the SEC's extended comment period on proposed rule changes in the Securities Exchange Act of 1934, which could allow securities laws to apply to decentralized exchanges in the same way they currently apply to stock exchanges. .
“It is impossible to require DEXs to register in the same way as national stock exchanges,” Grewal said. “Requiring the impossible violates the [Administrative Procedure Act]. Simply saying there are no economic data does not absorb the SEC from conducting an e economy analysis, especially when such data exist.” He added: “The SEC is attempting to pre-empt Congressional action by incorporating unsupported assumptions about its cryptocurrency jurisdiction into proposed rules.”
Some US lawmakers and crypto advocacy groups, including the Blockchain Association, have also criticized the SEC's proposal, claiming that the rule change would allow the commission to override its powers and expand its purview to a range of entities not equipped to deal with such issues. Regulatory requirements for financial products. According to Coinbase's chief legal officer, the proposed rule change has a path forward that requires “careful consideration of the profound differences between DEXs and traditional exchanges.” Coinbase’s comments come as the SEC is at the front of the US focus on cryptocurrency regulation. The commission has filed separate lawsuits against Binance and Coinbase for alleged violations of securities laws, sparking a backlash from lawmakers calling for the removal of SEC Chairman Gary Gensler.
Before the SEC filed its lawsuit but after Wells' notice suggested possible enforcement action Coinbase filed a response in support of its July 2022 written of enforcement petition, seeking to force the commission to provide regulatory clarity to companies seeking regist ration. Spend. As of June 13 , the SEC is awaiting the outcome of an appeal to federal court, giving it 120 days to respond to Coinbase's request.
