Coinbase, the largest crypto exchange in the US, has sued the Securities and Exchange Commission (SEC) for failing to provide an answer to a petition for regulatory clarity filed last summer. The petition, which was filed by Coinbase, asks the regulatory body whether it will create a set of rules specific to crypto assets. So far, the SEC has made no comment on the petition.
The head of Coinbase’s legal department has argued that the sector has the right to know whether the regulator even intends to create specific regulation for the space. Many US congressional officials have also taken issue with the SEC’s approach to crypto regulation, stating that an unpredictable and ever changing approach will drive innovation elsewhere.
Why now?
Coinbase has certainly had its fair share of tension with the SEC over the years, but this time it’s different. CEO Brian Armstrong has already made clear that the exchange would move elsewhere if the regulatory landscape in the US does not improve. The exchange also received a Well’s Notice last month, warning Coinbase that the SEC is likely to take enforcement action soon.
Over the past year, shares in Coinbase have dropped by 57%. With the wider market selloff which took place last year, Coinbase has suffered due to its purely crypto business model. The benefit of that however is that COIN also tends to recover alongside prices of digital assets. As a result, COIN has logged almost a 53% increase YTD as optimism slowly returns to the wider market this side of the year.
(About Coinbase)
Coinbase is a San Francisco-based cryptocurrency exchange platform founded in 2012. It offers a variety of services including buying, selling, and storing digital assets such as Bitcoin, Ethereum, and Litecoin, among others. Coinbase made history in April 2021 when it became the first cryptocurrency exchange to go public on the NASDAQ stock exchange, with a valuation of over $100 billion. Although 2022 saw the company’s share price log significant losses along with the wider crypto market.
