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The U.S. Securities and Exchange Commission (SEC) has rejected Coinbase’s petition for tailored rules for digital assets. SEC Chair Gary Gensler argued that the existing securities regime appropriately governs crypto asset securities and that the SEC has sufficient authority. The decision comes after Coinbase faced legal troubles with the SEC, which sued the cryptocurrency exchange for operating as an unregistered securities exchange.

In his statement, Gensler emphasized the importance of maintaining commission discretion in setting its own rulemaking priorities. He also mentioned that a crypto broker, likely referring to Prometheum Inc., has successfully used a special digital assets registration as a method of compliance. This suggests that there are already workable methods for operating within existing regulations.

However, there were dissenting voices within the SEC. Commissioners Hester Peirce and Mark Uyeda opposed the denial, hoping for useful conversations and ideas to emerge from the crypto industry. They believe that tailored rules could better address the unique characteristics of digital assets.

Coinbase, a leading cryptocurrency exchange, is seeking regulatory clarity and specific rules to navigate the rapidly evolving crypto landscape. The company had applied pressure for tailored rules in 2022 before being sued by the SEC. While Coinbase’s petition was denied, the SEC may still make a recommendation within the next four months.

Industry-specific Regulations and Ongoing Discussions

This development highlights the ongoing efforts by cryptocurrency lobbyists in Washington to seek industry-specific regulations. At the same time, legislative efforts in Congress have made progress but have not yet reached a final resolution. The Financial Stability Oversight Council, which includes the SEC chairman, has concluded that Congress needs to intervene and establish comprehensive regulations for the crypto industry.

The rejection of Coinbase’s petition reflects the SEC’s confidence in its existing regulatory framework for digital assets. However, it also underscores the need for further clarity and tailored rules that can effectively address the unique aspects of cryptocurrencies. The SEC’s decision will likely have implications for other crypto exchanges and companies seeking regulatory guidelines in the United States.

The SEC’s denial of Coinbase’s petition for tailored rules for digital assets reaffirms the commission’s belief that existing securities regulations are sufficient. However, the dissenting opinions within the SEC and the ongoing discussions

By Rajesh

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