Coinbase calls for the creation of a dedicated crypto regulatory authority

Coinbase has requested the creation of a single dedicated body to regulate digital assets and argues that the current supervision is too fragmented and that the centuries-old US value paper laws are unsuitable for today's cryptocurrency markets.

In a fundamental document shared with the congress, the largest US cryptocurrency exchange asked the legislator to separate the supervision of the markets for digital assets from other financial markets, since after a recent dispute with the Securities and Exchange Commission in Capitol Hill on the offensive

"In order to avoid a fragmented and inconsistent supervision of these unique and simultaneous innovations, the responsibility for the markets for digital assets of a single federal supervisory authority should be transferred," said Coinbase and found that the SEC, Commodity Futures Trading Commission and certain state regimes supervise all parts.

The company also suggested that an additional self -regulatory organization (SRO) create the supervision of this new regulatory system for digital assets that reflect the traditional financial markets.

The suggestions come because the tensions between Coinbase and the Sec have escalated in the past few months. Gary Gensler, Chairman of the SEC, said in September that Coinbase did not register with the supervisory authority, "although they have dozens of token who can be securities", a characterization that the company contests.

CEO Brian Armstrong also accused the regulatory authority in September to be "sketchy" and opaque after threatening to sue the company if it launched its lend product on the market to pay interest on cryptocurrencies, without registering with the regulatory authority. Coinbase later put the plans on hold.

In his proposal on Thursday, Coinbase argued that securities laws that were introduced in the 1930s have difficulty adapting to the current digital markets, and consequently suffocating risks and driving abroad. The document viewed by the Financial Times was first published by Wall Street Journal.

While Gensler said that many crypto products could be defined as securities, he has not published any other guidelines because the existing rules are sufficiently clear. In the past few months he has urged crypto platforms to contact the Sec and discuss whether they should register with the agency.

The regulatory debate is partly about whether digital products are "investment contracts" and thus federal law securities. After the so-called Howey test, the Supreme Court ruled that there is an investment contract if "a person invests their money in a joint company and profits only expect the project sponsor or a third party". .

"While the Howey test plays an important role in defining security, its application to digital assets even led to the SEC is unclear and inconsistent," said Coinbase in its suggestion.

The company also argued that the decentralized and source -open character of digital assets means that the current disclosure obligations in the securities laws are not useful.

"Every owner of a digital wealth value can check the functionality and governance structure of the financial value," it said. "The application of the disclosure obligations of public companies would probably mislead the public, which is actually essential information about a digital asset."

The SEC did not react immediately to inquiries about comments.