Cryptocurrency exchange Coinbase stated that the U.S. Securities and Exchange Commission (SEC) is seeking to "destroy" digital asset firms rather than regulate them. The statement from Coinbase was made in a May 31 court filing.

According to Watcher Guru, the court filing is part of Coinbase's efforts to get the SEC to establish a regulatory framework for the crypto industry.

Coinbase said the SEC is putting digital asset firms in a "Catch-22" by demanding that the firms comply with "an untenably expansive view of its statutory authority," suing firms that are not in compliance, and refusing to go through the rulemaking process that would make it possible to comply, according to a copy of the brief. "This pattern of conduct is a purposeful effort to destroy an industry by demanding the impossible and prosecuting companies that fail to achieve it," Coinbase said.

Coinbase petitioned the SEC to use its official rulemaking process to create clear guidelines for the digital asset industry. The SEC denied the petition, and two SEC commissioners dissented from the denial. According to a statement about their dissent, Commissioners Hester Peirce and Mark Uyeda said 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. The commissioners said that while they acknowledge the SEC's authority 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," Peirce and Uyeda said. "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.

Coinbase Chief Legal Officer Paul Grewal said the May 31 brief, which is challenging the SEC's denial of the petition, comes down to Coinbase's belief that the "SEC cannot claim broad jurisdiction over a new industry without proper authorization from Congress and without making clear rules," according to a post on X. "We appreciate the Third Circuit’s careful consideration in this matter," Grewal said. "Meanwhile, we’ll continue to push for clarity for the entire industry in every forum we can."

According to Investopedia, Coinbase enables users to buy, sell, and store digital assets on its platform. The company operates in more than 100 countries and had 108 million users as of 2022.