Coinbase sends closing briefing in SEC rulemaking dispute

Coinbase formally submitted its closing motions to the Third Circuit seeking to overturn the SEC’s dismissal of its rulemaking petition. This legal filing is part of an ongoing dispute between the cryptocurrency exchange and the regulator over transparency and fairness in the management of digital assets.

Tensions between Coinbase and the SEC escalated after the commission rejected Coinbase’s request for more explicit regulation. Paul Grewal, Coinbase’s chief legal officer, said via Post X that the entire case hinges on the critical, definitive statement contained in the SEC’s denial.

It argues that the SEC’s decision lacked substantive justification, which is the basis for Coinbase’s appeal to suspend the order.

Moreover, Coinbase’s legal arguments underscore the need for congressionally approved jurisdiction and clear rules before the SEC can expand its regulatory reach into new industries such as cryptocurrency.

The exchange argues that such measures are necessary to support innovation and growth in the U.S. digital asset market. SEC Chairman Gary Gensler maintains that digital assets are subject to existing regulations, a claim Coinbase and others in the industry dispute, calling for regulatory details consistent with the unique aspects of cryptocurrencies.

As the Third Circuit reviews this brief, its outcome will likely have implications for Coinbase and the broader digital asset regulatory landscape. This case highlights the need for a regulatory framework that balances innovation with investor protection.

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