(Bloomberg) — Coinbase Global Inc., the largest US cryptocurrency platform, is calling on the Securities and Exchange Commission to propose clear rules for the trading of digital assets.
In a petition submitted on Thursday, the exchange — which has clashed with the SEC in the past — asks the regulator to clarify which digital assets it considers to be securities. The company also stresses the importance of establishing guardrails, given the market meltdown that has wiped out trillions of dollars and bankrupted several companies.
“The U.S. does not currently have a functioning market in digital asset securities due to the lack of a clear and workable regulatory regime,” read Coinbase’s petition.
Under Chair Gary Gensler, the SEC holds the view that most digital assets are securities and requires exchanges to register with the agency. The regulator has generally pushed back, though, on the notion that it needs to go through and identify each token that fits the securities definition, saying it doesn’t do that for any other markets.
It did, however, label nine tokens as securities in a complaint filed Thursday that accused a former Coinbase employee and two other individuals of engaging in insider trading. Of the nine tokens identified, the largest is an Ethereum-based token called Amp that was created by Flexa Network Inc. The coin has a market value of about $700 million, according to CoinGecko.
Still, Coinbase asserts that the tokens it lists — just under 200 in the US — aren’t securities.
“We vet them quite carefully to make sure that they are as far away from being securities as possible,” said Faryar Shirzad, chief policy offer at Coinbase.
On top of the classification issue, Coinbase also presented a list of questions that the SEC should consider and seek public feedback on — a process that should not be rushed, Shirzad said.
“What we really want is an open, transparent process,” he said. “And that will take the time it takes.”
(Clarifies reference to tokens identified in the SEC complaint in the fifth paragraph.)
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