Coinbase Plans Crypto Regulations with US SEC

US-based crypto exchange, Coinbase has revealed plans to introduce proposals on regulations to the US Securities and Exchange Commission. According to reports, the proposals will help the commission develop favorable regulations for the crypto ecosystem. This comes on the heels of Coinbase’s shelving of its Lend product which was scheduled for release this month.

Coinbase’s attempt at proposing crypto regulations is likely prompted by the unsuccessful launch of its Lend product. The crypto exchange had received a warning letter from the US SEC in which it admonished Coinbase on the USDC APY product. Its letter was accompanied by a threat to initiate a lawsuit against Coinbase if it went ahead with the launch. 

Crypto Regulations Create Factions in the US

Crypto regulations have been a subject of dispute in the US between crypto proponents and skeptics. The debate has dragged on, even extending to the Infrastructure Bill, which has divided the US Senate. On its part, the US Securities and Exchange Commission has been making active attempts at regulating the crypto industry, with Chairman Gary Gensler stressing the importance of crypto regulations on Tuesday. The SEC head had taken a swipe at stablecoins likening them to poker chips. Following his critical stance, which has remained long-standing, the crypto market suffered a decline.

While taking these stringent measures, the US SEC has faulted the operations of several crypto firms. A case in point is Ripple Labs, the blockchain payments firm behind the sixth-largest cryptocurrency by market cap, XRP. Ripple has earned itself a lawsuit spanning almost a year for selling XRP tokens valued at $1.3 billion and which the commission considers a security. 

Ripple’s defense is that it had sought the commission’s opinion on the status of the native token. However, this argument has not availed it by any means. The status of the largest altcoin, Ethereum- having also conducted an ICO in 2017 like Ripple- still hangs in the air since an admission from the commission would go ahead to strengthen Ripple’s case. 

Coinbase Avoids Confrontation With the US SEC, Abandons Lend Product 

Coinbase escaped the commission’s lawsuit threat by scrapping the Lend product. Brian Armstrong, Coinbase’s CEO alleged in a tweet last week that US SEC failed to cite reasons it considered the Lend product as a security. Meanwhile, the Chief Legal Officer of the exchange, Paul Grewal argued that the USDC APY product was not an investment note or contract. Coinbase also abandoned the waitlist it had drawn for the now-erstwhile program since June. 

It is not known if the US SEC will accept Coinbase’s regulation proposal since the latter will advocate for a less hostile approach as opposed to the commission’s fiery approach. Notwithstanding, it speaks volumes of Coinbase’s aim to push for standardization in the crypto industry.

In 2019, Coinbase set up the Crypto Rating Council, an organization geared toward assisting emerging projects in ascertaining if they are within the premise of existing securities regulations. 

US-based crypto exchange, Coinbase has revealed plans to introduce proposals on regulations to the US Securities and Exchange Commission. According to reports, the proposals will help the commission develop favorable regulations for the crypto ecosystem. This comes on the heels of Coinbase’s shelving of its Lend product which was scheduled for release this month.

Coinbase’s attempt at proposing crypto regulations is likely prompted by the unsuccessful launch of its Lend product. The crypto exchange had received a warning letter from the US SEC in which it admonished Coinbase on the USDC APY product. Its letter was accompanied by a threat to initiate a lawsuit against Coinbase if it went ahead with the launch. 

Crypto Regulations Create Factions in the US

Crypto regulations have been a subject of dispute in the US between crypto proponents and skeptics. The debate has dragged on, even extending to the Infrastructure Bill, which has divided the US Senate. On its part, the US Securities and Exchange Commission has been making active attempts at regulating the crypto industry, with Chairman Gary Gensler stressing the importance of crypto regulations on Tuesday. The SEC head had taken a swipe at stablecoins likening them to poker chips. Following his critical stance, which has remained long-standing, the crypto market suffered a decline.

While taking these stringent measures, the US SEC has faulted the operations of several crypto firms. A case in point is Ripple Labs, the blockchain payments firm behind the sixth-largest cryptocurrency by market cap, XRP. Ripple has earned itself a lawsuit spanning almost a year for selling XRP tokens valued at $1.3 billion and which the commission considers a security. 

Ripple’s defense is that it had sought the commission’s opinion on the status of the native token. However, this argument has not availed it by any means. The status of the largest altcoin, Ethereum- having also conducted an ICO in 2017 like Ripple- still hangs in the air since an admission from the commission would go ahead to strengthen Ripple’s case. 

Coinbase Avoids Confrontation With the US SEC, Abandons Lend Product 

Coinbase escaped the commission’s lawsuit threat by scrapping the Lend product. Brian Armstrong, Coinbase’s CEO alleged in a tweet last week that US SEC failed to cite reasons it considered the Lend product as a security. Meanwhile, the Chief Legal Officer of the exchange, Paul Grewal argued that the USDC APY product was not an investment note or contract. Coinbase also abandoned the waitlist it had drawn for the now-erstwhile program since June. 

It is not known if the US SEC will accept Coinbase’s regulation proposal since the latter will advocate for a less hostile approach as opposed to the commission’s fiery approach. Notwithstanding, it speaks volumes of Coinbase’s aim to push for standardization in the crypto industry.

In 2019, Coinbase set up the Crypto Rating Council, an organization geared toward assisting emerging projects in ascertaining if they are within the premise of existing securities regulations. 

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