As tensions continue to mount between the Securities and Exchange Commission (SEC) and crypto exchanges in the U.S., Coinbase has emerged as a symbol of regulatory resistance to what it sees as an unfair and highly-flawed approach to Web3 oversight.
After months of tough talk from SEC Chair Gary Gensler (who has repeatedly said he views the coin offerings on crypto exchanges as securities) and frosty interactions with Coinbase, the agency reportedly launched investigations into every U.S.-based crypto exchange this month, according to Forbes.
It’s a bold move that has rattled the Web3 world.
This move comes on the heels of a July complaint the SEC filed in federal court that listed nine tokens offered on Coinbase as securities. Rather unhelpfully, the complaint doesn’t specify why these particular tokens (which include AMP, DDX, DFX, LCX, POWR, RGT, RLY, and XYO) differ from others offered on the exchange.
However, with the exception of Coinbase (and perhaps Ripple, the company behind the XRP token), crypto exchanges and the projects behind many of the tokens under investigation remain relatively quiet on the SEC’s recent movements.
“Laws from the 1930s couldn’t predict crypto,” Coinbase tweeted the same day the SEC issued the complaint as it filed a petition with the regulatory agency to issue new and more modernized securities rules that work for everyone.
In another July blog post by the company, Coinbase Chief Legal Officer Paul Grewal reiterated the platform’s position that “Coinbase does not list securities. End of story.” Grewal also said the Commodities Futures Trading Commission (CFTC) Commissioner Caroline D. Pham remarked that these investigations are a “striking example of ‘regulation by enforcement.’”