The Crypto Roundup: 24 September 2024 | CryptoCompare.com

Coinbase is urging a federal appeals court to compel the U.S. Securities and Exchange Commission (SEC) to create specific rules for digital assets, arguing that the SEC has failed to clarify whether digital assets qualify as securities. Coinbase’s lawyer, Eugene Scalia, presented the case to a three-judge panel in Philadelphia, criticizing SEC Chair Gary Gensler’s approach, which he described as aggressive enforcement without providing a clear registration pathway for crypto companies.

Coinbase initially filed the lawsuit in December 2022, after its request for formal rules regarding digital assets was denied by the SEC without explanation. Scalia argued that the SEC has been inconsistent, with Gensler previously acknowledging in 2021 that exchanges were not regulated but later reversing course to enforce actions against companies like Coinbase without a clear framework.

The SEC views most digital assets as securities under the Howey test, a legal precedent defining a security as any investment of money in a common enterprise with an expectation of profits based on others’ efforts. The SEC has brought significant enforcement actions against crypto firms, including Coinbase, for failing to register.

In response, the crypto industry has lobbied for clearer legislation. A bill proposing a regulatory framework passed the House in May 2023 with bipartisan support, signaling growing momentum in Congress for crypto-specific regulation.

The case is complicated by upcoming presidential elections, with candidates such as Donald Trump and Kamala Harris making promises to revise or support crypto regulation. Judges in the panel expressed concerns about regulatory uncertainty, but the SEC argued that existing laws, guided by the Howey test, are sufficient. The court has not yet ruled on the matter.

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• Source: https://www.cryptocompare.com/email-updates/daily/2024/sep/24/