SEC and Coinbase clash in court over crypto rulemaking

The SEC and Coinbase have faced off in a federal appeals court in Philadelphia as the largest U.S. cryptocurrency exchange presses the securities regulator to create new rules for digital assets. Coinbase sued the SEC last year in a bid to compel the regulator to act on a petition for rulemaking that it filed in 2022. In that petition, Coinbase called on the SEC to provide clarity on the circumstances under which a digital asset is a security and create a new market structure framework that is compatible with cryptocurrencies. The commission denied Coinbase’s petition for new rulemaking in December 2023, saying it would not propose new rules because it fundamentally disagreed that current regulations are “unworkable” for the crypto sector. Coinbase has now asked the court to overturn that denial, saying the SEC has made it impossible for the crypto firm to operate and comply with U.S. regulations.

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