Cryptocurrency exchange Coinbase, the largest in the United States, said it had tried to register with the country’s Securities and Exchange Commission, the SEC, but was unsuccessful. In an interview with the Yahoo Finance portal, Coinbase policy director Faryar Shirzad said that “there is simply no way” to register with the SEC.
He pointed out that Coinbase submitted a petition to the regulator in June of last year listing a number of specific issues that the SEC would have to resolve in order for cryptocurrency platforms to register, as requested by SEC Chairman Gary Gensler.
In December 2022, Gensler told the portal that his goal with regard to the crypto market is to bring platforms, exchanges and other crypto companies into compliance. According to what the president said to the SEC at the time, crypto companies can work properly with the regulator or else face enforcement actions.
“And I would have to say the runway is getting shorter,” he said.
SEC thwarts Coinbase registration attempt
However, it seems that it is not that simple to obtain a registration with the US regulator. That’s because, according to Shirzad, the SEC didn’t even respond to the questions the exchange sent about how to register. Furthermore, he stated that the SEC’s speech does not match the clarity offered to industry players.
“When we ask specific questions: How do we arrive at a path to registration? There is never an answer,” said Shirzad. “We think the opportunity to build a cryptocurrency market in the United States is extremely exciting. But we stay away from it because there is no way for the registry. There is simply no way to do it.”
Coinbase Highlights Attention to Listed Assets
Regarding the assets that Coinbase makes available to investors, Shirzad pointed out that Coinbase does not trade securities on its platform. Instead, it analyzes each asset before listing it. The objective is to ensure that the asset is not a fraud, that it is resilient and that it cannot be classified as a security.
“We check if [tem o] potential to be treated as a title,” said Shirzad. “If it is, we don’t list it.”
As Shirzad explained, before listing an asset, the exchange consults the so-called Howey Test. This is a Supreme Court ruling that the SEC uses to determine whether a contract is an investment contract and therefore whether the asset should be treated as a security.