Leading digital currency exchange Coinbase (NASDAQ:COIN) is actively engaging in the ongoing discourse surrounding cryptocurrency regulations. In a proactive move, the platform filed a legal brief with the Third Circuit Court on Wednesday, urging for more precise guidelines following the recent actions taken by the Securities and Exchange Commission (SEC) against fellow exchange Kraken. Leveraging the SEC’s case, Coinbase is seeking a mandamus order, an extraordinary court mandate that compels an official to correctly fulfill their duties.
This strategic move by Coinbase follows the SEC’s Monday charges against Kraken, accusing the exchange of operating without proper registration and jeopardizing client assets through the misuse of funds. The regulatory body also classified several cryptocurrencies, including ADA and SOL, as securities—a determination with significant implications for the regulation and trading of these assets.
Coinbase’s CEO, Brian Armstrong, has consistently expressed the company’s dedication to regulatory compliance. In a public statement on Sunday, Armstrong underscored Coinbase’s adherence to money transmitter laws, drawing a sharp contrast with the legal challenges faced by Binance. Emphasizing the importance of stability over growth in times of regulatory uncertainty, Armstrong criticized the lack of clear guidelines in the U.S., contending that it pushes crypto transactions offshore.
In response to the SEC’s charges, Kraken has agreed to a $30 million civil penalty related to its crypto asset staking services. The SEC is pursuing additional injunctive relief, conduct-based injunctions, and disgorgement of ill-gotten gains with interest due to identified issues in internal controls and recordkeeping 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 anticipating potential SEC enforcement actions akin to those faced by Kraken.
With the SEC expected to deliver a status report by December 15, Coinbase’s proactive call for clarity could signify a pivotal moment in shaping the future regulatory landscape for cryptocurrencies in the United States.
