1 month ago
Coinbase has submitted a powerfully worded remark missive to the US Securities and Exchange Commission (SEC) opposing the agency’s connection to expand the definition of “exchange” to see decentralized exchanges (DEXs).
The SEC’s proposal, which has reopened for nationalist comment, has drawn important criticism from Coinbase and different manufacture players. The exchange’s missive highlighted concerns that the regularisation could stifle innovation and enforce unworkable compliance burdens connected DEXs.
Fundamentally flawed
In the missive addressed to SEC Secretary Vanessa A. Countryman, Coinbase Chief Legal Officer Paul Grewal argued that the projected regularisation is fundamentally flawed successful some its conception and execution.
The missive emphasized that the SEC’s cost-benefit investigation is inadequate, arsenic it fails to relationship for the unsocial operational characteristics of DEXs and the perchance terrible economical impacts of the projected regulations connected the broader crypto market.
Coinbase’s main contention is that the SEC’s projected enlargement of the speech explanation is aimed chiefly astatine regulating DEXs, which facilitate trading successful integer assets without a cardinal intermediary. The institution asserts that the regularisation would enforce “anachronistic and impossible-to-satisfy requirements” connected DEXs, perchance driving them retired of the US marketplace entirely.
The speech further warned that this could pb to a important simplification successful innovation and competitiveness wrong the American fiscal sector, arsenic developers and businesses whitethorn beryllium forced to determination their operations offshore.
The missive besides highlighted the caller Supreme Court ruling successful Loper Bright Enterprises v. Raimondo, which overturned the Chevron deference and further questioned the legality of the SEC’s projected rule.
Coinbase pointed retired that the ruling diminishes the likelihood of courts upholding the SEC’s effort to widen the Exchange Act’s scope to DEXs, particularly erstwhile the bureau itself admits to lacking capable accusation connected however DEXs operate.
Moreover, the speech criticized the SEC for basing its outgo estimates connected traditional, centralized entities, which the institution argued are fundamentally antithetic from decentralized platforms.
It added that DEXs, which run without a centralized radical of persons, cannot comply with existing registration and disclosure requirements, making the SEC’s assumptions astir compliance costs some unrealistic and misleading.
Call to withdraw
Coinbase is calling for the SEC to retreat the projected regularisation and to behaviour a much thorough and rational appraisal of the economical impacts earlier considering immoderate further regulatory action.
The speech warned that the rule, arsenic presently proposed, would apt pb to the exit of DEXs from the US market, thereby depriving American users of the benefits of decentralized fiscal systems, specified arsenic enhanced transparency and little transaction costs.
The missive concluded with a petition for the SEC to re-notice the rule, allowing for meaningful stakeholder input aft the bureau has gathered and assessed the indispensable information.
It further stressed that immoderate regularisation successful this abstraction indispensable beryllium based connected a wide and accordant explanation of what constitutes a information successful the integer plus market, a determination the SEC has yet to make.
The station Coinbase opposes SEC connection to redefine exchanges to see DEXs appeared archetypal connected CryptoSlate.
English (US) 