On December 15, U.S. Securities and Exchange Commission (SEC) Commissioners Hester Peirce and Mark Uyeda expressed their dissent regarding the SEC's denial of Coinbase's rulemaking petition. The commissioners stated that they believe the SEC needs to address the issues raised by new technologies by soliciting input from the public and then issuing guidance or engaging in rulemaking.
In a statement about the denial, SEC Chair Gary Gensler maintained that he believes the securities laws established in 1933 and 1934 are sufficient to regulate the crypto industry. "The existing securities regime appropriately governs crypto asset securities," said Gensler.
According to Peirce and Uyeda, while they acknowledge the SEC's ability to set the timing of its rulemaking agenda, they believe Coinbase's petition raised issues that need to be addressed. Addressing those issues is "a core part of being a responsible regulator," said the Commissioners. "The public benefits from open conversations about how new products and services can be offered within a sensible regulatory framework to meet the needs of our fellow Americans," according to Peirce and Uyeda.
Paul Grewal, Coinbase's chief legal officer, commented on this matter on X. He stated, "We're grateful that two Commissioners disagreed with the denial and called for real dialogue. We should be working together to create laws and rules that will benefit consumers and US innovation, not defending lawsuits based on legal positions that change month after month."
Grewal further noted on X that after Coinbase was approved to go public in 2021, Gensler had stated during Congressional testimony that existing regulatory authorities were not applicable to the digital asset industry. Grewal added that Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam recently stated that many digital assets are commodities according to existing law.
Behnam appeared on CNBC's Squawk Box on Dec. 12, where he stated, "Under existing law, many of the tokens constitute commodities," according to a video of the conversation shared on X. Behnam said that the discussion around how to regulate digital assets has been ongoing "for years," and he called on Congress to "step in" to fill existing gaps in the regulatory framework for the industry. He described crypto as a "new technology" in need of "a new way of thinking around policy and legislation."
In another post on X, Grewal announced that Coinbase is now challenging the SEC's "arbitrary and capricious denial of our petition for crypto rulemaking."
