Crypto After being sued by Coinbase, SEC Chair Affirms Crypto Regulations in the US are clear

In a video posted on Twitter on Thursday, April 27, 2023, Gensler said crypto exchanges should treat cryptocurrencies like securities and stop acting as if the rules were ambiguous.

Gensler titled his video, “Office Hours,” and tries to show what crypto exchanges are doing is marketing and selling securities very clearly, even if the debate on the topic has been clouded.

“The law is clear. If you are a securities exchange, clearing house, broker or dealer, you must comply, register with us, and handle conflicts of interest and disclose important information. For 90 years, these laws have helped protect investors like you," said Gensler.

The regulator's comments come days after crypto exchange Coinbase sued the SEC , asking that the agency be forced to publicly share its answer to a months-old petition about whether it would allow the crypto industry to be regulated using the SEC's existing framework.

Coinbase, which received Wells' notification in March 2023 indicating enforcement action could be expected, argues the SEC is inconsistent in how it treats cryptocurrencies and the crypto industry needs regulatory clarity.

Since January, the SEC has taken action against crypto exchanges such as Bittrex , Gemini, crypto lender Genesis, and a number of individual actors accused of manipulating crypto assets, including crypto entrepreneur Justin Sun and Terraform Labs founder Do Kwon.

Gensler said by not complying with SEC regulations, the platform lacked basic investor protection, which meant clients couldn't access their funds in the event of a problem, including bankruptcy.

Cryptocurrency exchange  Coinbase  has filed a court action to pressure the US Securities and Exchange Commission (SEC) regarding a July 2022 petition seeking regulatory guidance.

In an announcement on Monday, April 24, 2023, Coinbase's chief legal officer, Paul Grewal, emphasized that more than 1,700 entities and individuals submitted comments to support requests for clarity.

The company believes regulatory clarity in the  crypto space  is long overdue. Even though securities regulators are initiating a series of potential enforcement actions, crypto companies have not been briefed on how the SEC believes the laws apply to their businesses.

“From the  SEC's public statements  and law enforcement activities in the crypto industry, it appears that the SEC has decided to reject our petition. But they haven't told the public yet. So the action that Coinbase filed today is simply asking the court to ask the SEC to share its decision," Grewal wrote, quoted from, Friday (28/4/2023).

Grewal added that it was unusual for an agency to take enforcement action based on legal views that had not been formally shared with the public.

“Again, Coinbase is not asking the Court to instruct the agency how to respond. We are simply asking that the Court order the SEC to respond at all, which they are legally obligated to do," Grewal continued.

The company noted in its announcement Monday the proposed legal action was part of years of continuing pleas to leaders in Washington for clear rules of the road.

Coinbase acknowledges regulation is necessary and highlights how the company has asked authorities to establish such guidelines for greater clarity.

Coinbase is seeking “ground rulemaking,” and while the federal court action seeks to resolve the impasse regarding the petition, the company says it will pursue it to the end.