Key facts:
-
Coinbase’s legal director is confident that exchanges will find a fair player in court.
-
“Regulatory clarity is the one thing nobody expects, but it will come,” says an industry player.
Lawsuits filed this week by the United States Securities and Exchange Commission (SEC) against exchanges Binance and Coinbase are leaving new evidence that the country does not have a clear regulatory framework to oversee the cryptocurrency industry.
The lawsuits involving two of the cryptocurrency exchanges with the largest number of users in the United States and the world, they will have to travel a long and intricate route so that the country finally has clear rules for the cryptocurrency market. This is being warned by lawyers and analysts who closely follow and are involved with the recent actions of the SEC.
One of these actors is Paul Grewal, Coinbase’s head of legal. To the question ofHow long will it take for the current dispute between the SEC and cryptocurrency exchanges to be resolved?responds that it will be a long legal battle, “perhaps several years.”
added in a podcast of this June 8 that, in fact, Coinbase has already been seeking regulatory clarity for a long time “because before we became a public company in 2021 (Coinbase is listed on Nasdaq) cWe began to request regulatory clarity and there is even a formal petition that is now the subject of litigation in federal court.
The request mentioned by Grewal was introduced in July of last year, and now the court is asking the SEC to respond to some points requested by Coinbase in no more than seven days.
A case that can go all the way to the Supreme Court
In itself, the Court wants to know if the new lawsuit against Coinbase means that the SEC is moving to deny its request for clear regulation, or if it is because the agency needs more time to evaluate the request.
On Tuesday June 6, after SEC Accused Coinbase of Violating Rules and Offering Unregistered Securities through its staking service, Grewal he pointed in a tweet that the agency “could not proceed with litigation if it has not yet decided to deny our rulemaking request.”
“We continue to believe that traffic rules, from legislation or rule making or both, should take precedence over enforcement actions. That’s why we petitioned the SEC for rulemaking almost a year ago in the first place.”
Paul Grewar, Coinbase’s chief legal officer.
The dispute between the SEC and cryptocurrency exchanges It could even make it to the US Supreme Court.as aim Kiran Nasir Gore, who is a dispute attorney. She thinks the Binance case may be of interest to the court because it “includes allegations of wrongdoing, diversion of client funds, and improper mixing of assets.”
However, the main problem remains that The United States does not have clear rules to clarify which assets are valuable or which are not, and the Supreme Court could provide that guidance, as commented by specialists.
“It will take time, but regulatory clarity will come”
For Dan Morehead, founder and managing partner of the Pantera Capital cryptocurrency fund, “for better or worse”, the solution will not come quickly. “And so take all the time that is necessary, the important thing is that the conflict between the SEC and the exchanges Binance and Coinbase will bring regulatory clarity which is the only thing that nobody expects, but that will happen anyway, ”he added.
Morehead fears that as long as the dispute rages and the SEC remains aggressive towards the industry, trading in US cryptocurrencies will shift to other offshore-registered platforms.
“At one point last year, 95% of trade in digital assets was done outside of the United States. I agree that bad actors should be prosecuted, but you also have to recognize that most people are using cryptocurrency for very legitimate actions and it’s better if that happens in the United States.”
Dan Morehead, founder of Pantera Capital.
For his part, Jay Clayton, a former head of the SEC, added that “what makes us stumble in the cryptocurrency market is the belief that new technologies would be able to evade the regulatory framework and be a problem for the financial system”.
Clayton also agreed to stress that the cryptocurrency ecosystem must have a regulation adjusted to its characteristics so that it can offer security to users, as he explained during an interview broadcast through Bloomberg Live.
