Coinbase (NASDAQ:COIN) has taken a proactive stance in the ongoing debate over cryptocurrency regulations. On Wednesday, the leading digital currency exchange filed a legal brief with the Third Circuit Court, calling for clearer guidelines in the wake of the Securities and Exchange Commission's (SEC) recent actions against fellow exchange Kraken. Coinbase is leveraging the SEC's case to demand a mandamus order—an extraordinary court mandate that directs an official to perform a duty correctly.
This move comes after the SEC charged Kraken on Monday with operating without proper registration and putting client assets at risk by misusing funds. The regulator also classified several cryptocurrencies, including ADA and SOL, as securities—a decision that has significant implications for how these assets are regulated and traded.
Coinbase CEO Brian Armstrong has been vocal about his company's commitment to regulatory compliance. On Sunday, he highlighted Coinbase's adherence to money transmitter laws, contrasting it with Binance's legal troubles. Armstrong emphasized the importance of stability over growth in times of regulatory uncertainty and criticized the U.S.'s lack of clear guidelines, which he believes pushes crypto transactions offshore.
In response to the SEC's charges, Kraken has agreed to a $30 million civil penalty for its crypto asset staking services. The SEC is seeking further injunctive relief, conduct-based injunctions, and disgorgement of ill-gotten gains with interest due to poor internal controls and recordkeeping issues identified since at least September 2018.
Meanwhile, Bittrex Global is taking preemptive measures by advising its clients to convert their U.S. dollars into euros or cryptocurrencies, presumably in anticipation of potential SEC enforcement actions similar to those faced by Kraken.
As the industry awaits a status report from the SEC by December 15, Coinbase's push for clarity could mark a pivotal moment in shaping the future regulatory landscape for cryptocurrencies in the United States.
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