Coinbase defends the list of the list despite the pressure of the SEC

Coinbase defends the list of the list despite the pressure of the SEC

Coinbase has a problem. According to reports, US regulating authorities examine whether it disguises itself as a non-registered securities exchange and enables the trade in digital assets that fall under the responsibility of the Sec.

The investigation was first reported when the SEC was open to insider trade against the former coinbase product manager Ishan Wahi and two others who concerned at least 25 digital assets.

The SEC assumes that at least nine of these cryptocurrencies are securities. Like listed companies, securities releases must submit annual accounts and other disclosure to create transparency to support well -founded investment decisions.

A week after the message from Wahi's indictment became known, Bloomberg reported on details of an open SEC examination by Coinbase, which took place before the insider trade case. The shares of Coinbase went back the next day.

Coinbase wants to list every possible token

According to Bloomberg, the SEC strengthened its testing of Coinbase after the platform started to expand the range of digital assets that are available to dealers in the USA.

In January last year "Coinbase opened the door" for token emitters about his then new "Asset Hub", practically a form that can fill out startups, in the hope that their digital assets will be listed on coin base.

COINBASE has described its listing criteria in detail, which from the question of whether the asset is regarded as an investment or profit expectations are reached by centralization concerns in terms of control over the protocol or user money up to the general code quality.

Brian Armstrong, the billion -dollar CEO of Coinbase, later tweeted that it was the goal of Coinbase to "list every asset where this is legal", however, warned that the markets should not see the notations as an approval of this financial value by coin base - apart from the fulfillment of its minimum standards.

The list frame reflects the " Howey-test is an investment contract and should therefore be regulated as a security.

In 2019 the former chairman Jay Clayton This ether may have been a security, but has since developed into something else. Current chairman Gary Gensler muddy in January, by not besides bitcoin as a non-security-relevant digital asset cited.

Dario de Martino, partner of the law firm Allen & Overy, explained Blockworks in an email that sec-employees Decentralization in the decision as to whether a token should be regulated as a security. "However, no helpful guidance was offered to define or achieve a 'sufficient decentralization', which presents market participants with a mystery," said de Martino.

Coinbase, like countless other cryptocurrency companies in the past half decade, has still complained about the lack of regulatory clarity despite the long paper from 2019 when it comes to securities of digital assets explained its methods.

Paul Grewal, Chief Legal Officer from Coinbase, claimed in A Last week checked the SEC last week Frame for the decision as to which tokens should be listed, a part of which determines whether these assets could be considered as securities. "Coinbase does not list securities on its platform. Point," wrote Grewal.

This cat-and-mouse game took place in December 2020 when the sec sues ripple labs and its top executives. Coinbase almost immediately decoted in response to the case.

Coinbase also pulled the plug of its interest-bearing crypto account product-which would have promised the customer a return of 4 % on USDC deposits-after the SEC had threatened with a lawsuit and after the crypto loan blockfi had questioned its own similar product from the supervisory authorities.

The Howey test is still "mushy" when it comes to classification of investment contracts, Byrne said, regardless of whether the associated assets are on the blockchain or not.

"There is no authority in the United States that is commissioned to conduct every investment contract through this mushy test and to draw a legally final conclusion that everyone else can rely on," said Byrne.

Coinbase has a comprehensive legal responsibility: not to operate as an unregistered securities exchange. "That means if you are ruthless or negligent or intend to act securities on your platform, you could have a problem," said Byrne.

In a explanation sent to Blockworks by email, a spokesman for Coinbase said that it had initiated his "robust review process", since it was aware that existing securities regulations do not work for securities of digital assets.

"The rules for the securities markets have been developed decades before the emergence of crypto. When these authors wrote rules for the regulation of square pens, they did not take into account how these rules would affect the unpredictable round holes of the future," they said.

Despite the declared trust of Coinbase in his process, the effort to list the maximum possible number of tokens led to conflicts with the Sec. In a race for market shares, the ambition from Coinbase may have just returned.

visit this, the most popular institutional crypto conference in the industry. Use the Code NYC250 to get 250 $ discount on tickets (only available this week).

The contribution Coinbase Defends Listing Process, despite the second printing is not financial advice.