Coinbase Global, the largest U.S. cryptocurrency exchange, filed a petition on Monday to force the U.S. Securities and Exchange Commission (SEC) to create new rules for digital assets, it said in a blog post. This is the latest move in escalating tensions between securities regulators and cryptocurrency exchanges.
Coinbase (NASDAQ:COIN) filed a rulemaking petition with the SEC last year, urging regulators to provide clarity on the situation in which digital assets are securities and to create a new market structure framework compatible with cryptocurrencies.
The SEC’s failure to publicly respond to the petition led Coinbase to file a legal challenge, Coinbase Chief Legal Officer Paul Grewal said in this blog post.
“Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC. But I haven’t heard how the SEC believes the law applies to our business,” Grewell added.
The petition will be filed with the U.S. Court of Appeals for the Third Circuit.
It is believed that the cryptocurrency industry operates in a gray area in terms of regulation where existing US securities laws do not apply, and that new laws are needed to regulate the sector.
SEC Chairman Gary Gensler said crypto companies must abide by existing laws and no new crypto-related regulations are needed.
Coinbase said in March that it had been told by the company that SEC officials intended to recommend enforcement action against the company. The company said in a blog post at the time that it was willing to fight future enforcement action in court.
In July, Coinbase disclosed an SEC investigation into its asset listing process, staking program, and revenue-generating products when it filed a petition for rulemaking.