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Coinbase Takes On The SEC
Last Updated: April 25, 2023
✓ Fact Checked
COINBASE TAKES ON THE SEC
Coinbase has filed a lawsuit against the SEC in an effort to obtain clarity on how existing securities laws can be applied to the digital asset sector.
Previously, the SEC warned Coinbase that it was planning to sue the exchange over listing and offering unregistered securities.
Let's hope this does not escalate into a high-profile case that could shake the crypto market.
In July 2022, Coinbase submitted a petition to the SEC demanding a clear response regarding the regulation of digital assets.
Over the following months, the Commission did not respond to the request. Now, the company is seeking to have the request addressed through legal action.
In this petition, Coinbase urges the SEC to "propose and adopt rules governing the securities market that trade using digital methods."
Essentially, the exchange is asking for public clarification on whether existing regulatory frameworks can be used to oversee activities in the crypto asset sphere.
Since July of last year, the SEC has not commented on the petition.
Meanwhile, the Securities and Exchange Commission has increased pressure on cryptocurrency companies.
"The law requires the SEC to respond to such requests 'within a reasonable time,' but we have not received a coherent response. That's why we filed a lawsuit today (April 24)," said Coinbase's CLO Paul Grewal.
He added the following:
It should be noted that Coinbase received a "Wells Notice" from the SEC in late March. Shortly after, the company's CEO Brian Armstrong openly stated that the exchange was prepared to leave the United States.
P.S. A Wells Notice is a formal notice from the SEC that lets the recipient know that the agency has plans of bringing enforcement actions against them.
Well. The drama is on.
TL;DR: Coinbase has filed a lawsuit against the SEC in an effort to obtain clarity on how existing securities laws can be applied to the digital asset sector.
ETHEREUM CHRONICLES
It's been almost two weeks since the unlocking of staked ETH.
Nothing disastrous happened, stakers didn't crash the ETH price, and the world didn't turn upside down.
At the moment, 14.5% of all ETH is staked (~18,800,000 ETH, worth $34 billion).
If the SEC hadn't banned staking on the Kraken exchange, there would be even fewer people wanting to withdraw ETH.
So, what's next?
The demand for ETH staking is likely to continue growing, as it depends not only on the profitability of staking itself but also on the development of DeFi.
For example, staking pools users can earn additional interest in various DeFi protocols by using their liquid staking derivatives (LSD) for deposits, AMM (Automated Market Maker) pools, and so on.
The more such tools there are, the more eager people will be to lock up their ETH.
And if the SEC continues to stifle staking on centralized exchanges, decentralized staking pools will benefit even more.
Will this make ETH price go up?
The current Ethereum ($ETH) staking situation is considered a positive sign by many, but how do other Layer-1 blockchains with higher staking ratios perform?
Among Proof-of-Stake (PoS) Layer-1s, ETH has one of the lowest staking ratios:
ETH: 14.5%BNB: 15.3%ADA: 65%MATIC: 39%AVAX: 61%ATOM: 69.7%SOL: 72.4%DOT: 47.9%
Since the all-time high prices in Autumn 2021, ETH (-62%) has outperformed all of the assets on the list except for BNB (-52%), which also has a low staking ratio.
ADA, with one of the highest ratios, is down 88%.
The low withdrawal rate of ETH implies that there will be no immediate oversupply in the market.
However, judging from the performance of other Layer-1s, a high staking ratio does not guarantee positive price action.
Now you know!
TL;DR: Two weeks have passed since the Shanghai Update which allowed stakers to retrieve their locked funds. The role of staking is only about to increase in the DeFi world.
COOL FACTS TUESDAY
Block 666,666 of Bitcoin has a fascinating backstory that speaks to the mysterious origins of the cryptocurrency.
Embedded within it, is a message that reads:
"Do not be overcome by evil, but overcome evil with good" - a profound and inspirational message that highlights the Bitcoin potential to bring positive change to the world.
The message is believed to be a reference to the global financial crisis of 2008, which was a key driver for the creation of Bitcoin by the enigmatic founder, Satoshi Nakamoto.
After the crisis, Nakamoto went underground and disappeared from the public view. But before doing so, he left behind a revolutionary idea that has changed the world.
Despite Nakamoto's disappearance, the development of Bitcoin continued under the guidance of the community.
One of the key members of this community was Mike Hearn, a former Bitcoin developer who corresponded with Nakamoto.
In April 2011, Hearn reached out to Nakamoto to ask if he planned to return to working on Bitcoin.
In response, Nakamoto stated that he had "moved on to other things" and that Bitcoin was in good hands.
SELECTED MEME OF THE DAY
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