U.S. crypto exchange Coinbase's petition to the Securities and Exchange Commission (SEC) to prod it toward a system of tailored rules for digital assets was rejected by the regulator on Friday.
"The existing securities regime appropriately governs crypto asset securities," said Chair Gary Gensler, in a statement issued with the denial. Besides arguing that the SEC has sufficient authority in today's laws, he said the industry watchdog has already been engaging in rule proposals to directly regulate crypto businesses, and its enforcement division has also been able to address wrongdoing.
Gensler made a third argument, too, that "it is important to maintain commission discretion in setting its own rulemaking priorities."
Coinbase had applied this formal pressure in 2022, before it was itself sued by the SEC as an unregistered securities exchange. Earlier this year, the company had asked a federal court to force a response from the agency, which has now arrived.
"The commission disagrees with the petition’s assertion that application of existing
securities statutes and regulations to crypto asset securities, issuers of those securities, and
intermediaries in the trading, settlement, and custody of those securities is unworkable," the five-member commission concluded in its two-page response, which said the agency had given the request careful consideration. "The commission concludes that the requested rulemaking is currently unwarranted and denies the petition."
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Gensler also noted – without naming Prometheum Inc. – that a crypto broker has used a special digital assets registration, suggesting this method of compliance is "workable."
