SEC faces accusations of contradiction in Coinbase rulemaking dispute

12:20 pm
December 16, 2023
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**SEC’s Coinbase Rulemaking Dispute Raises Concerns of Contradiction**

The U.S. Securities and Exchange Commission (SEC) is entangled in a legal battle with Coinbase Global Inc. In the midst of this, John Deaton, representing XRP holders, has accused SEC Chairman Gary Gensler of misleading the public and conflicting with his own views on cryptocurrencies.

The SEC rejected Coinbase’s petition for rulemaking citing three reasons: the application of existing securities laws to cryptocurrencies, the commission’s engagement with crypto securities markets through rulemaking, and the importance of preserving the Commission’s discretion in setting its rulemaking priorities.

John Deaton responded to the SEC Chair’s letter, emphasizing that Coinbase’s request hinges on the unique characteristics of the crypto ecosystem, particularly in terms of asset volatility and the classification of assets as securities under current laws. This contradicts Gensler’s previous statement during a congressional hearing earlier this year, where he acknowledged the distinct nature of crypto and the existence of a regulatory gap.

Deaton noted that the SEC’s stance in the Coinbase dispute contradicts prior communications and accused Gensler’s reversal on the crypto issue as politically motivated, possibly influenced by Senator Elizabeth Warren.

The SEC’s inconsistent position on cryptocurrencies has become more apparent through its actions and statements. It also faces legal disputes with other key industry players like Binance. Additionally, the SEC declined to appeal its loss against Grayscale Investments, which intended to convert its Bitcoin Trust into a functioning spot Exchange Traded Fund (ETF).

This dispute has raised concerns about the SEC’s stance on cryptocurrency regulation, particularly under the leadership of Chairman Gary Gensler.

*FAQs*

**Q: Why has the SEC rejected Coinbase’s petition for rulemaking?**
A: The SEC cited reasons including the application of existing securities laws to cryptocurrencies, the commission’s engagement with crypto securities markets through rulemaking, and the importance of preserving the Commission’s discretion in setting its rulemaking priorities.

**Q: What is John Deaton’s accusation against SEC Chairman Gary Gensler?**
A: John Deaton has accused Gensler of ‘gaslighting’ the public and maintaining contradictory views on cryptocurrencies, alleging political motivations behind Gensler’s stance.

**Q: How has the SEC’s position on cryptocurrencies become apparent?**
A: The SEC’s actions and statements, along with its legal disputes with industry players like Binance and Grayscale Investments, have brought to light its inconsistent position on cryptocurrencies.


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