How the Coinbase SEC Framework Could Reshape Crypto Regulations

The post How the Coinbase SEC Framework Could Reshape Crypto Regulations appeared first on Coinpedia Fintech News

Coinbase is stepping up its efforts to bring clarity to crypto regulations in the U.S., proposing a new framework for the SEC to follow. The exchange wants clear rules that distinguish digital assets from traditional securities and is urging Congress to take the lead in defining regulatory boundaries.

The Call for Clearer Rules

SEC Commissioner Hester Peirce recently asked for industry input on crypto regulations, and Coinbase responded with a detailed roadmap. The exchange argues that the SEC’s current approach creates uncertainty, making it difficult for businesses and investors to navigate the space. According to Coinbase’s chief policy officer, Faryar Shirzad, a well-structured and transparent framework will provide certainty for developers, clear guidelines for industry players, and strong protections for investors.

Shirzad praised Ripple for securing a huge legal victory against the SEC. He congratulated CEO Brad Garlinghouse and legal head Stuart Alderoty for standing their ground.

He pointed out that the SEC dropping its appeal confirms a key legal point—crypto tokens themselves aren’t investment contracts. Shirzad slammed SEC Chair Gary Gensler for misleading the public on this for years, saying Ripple’s fight has finally cleared things up.

Now, he says it’s time for Congress to step in and create proper rules for crypto. He credited Ripple for pushing the law forward and helping bring clarity to the industry.

Separating Crypto from Traditional Securities

In his blog post he addressed one of the key issues of SEC’s classification theory and how digital assets are classified. It believes that cryptocurrencies that don’t represent ownership in a business should be treated as commodities, not securities. This distinction is crucial because it would allow financial markets to integrate blockchain-based assets more smoothly, improving liquidity and efficiency.

Plus, Coinbase is pushing back against the SEC’s stance that secondary market sales of digital commodities should be considered securities transactions. It argues that once an asset is in circulation, its trades should not fall under securities laws, making it easier for crypto assets to move freely in the market.

Congress Should Take the Lead

Coinbase also believes that broader crypto regulations shouldn’t be left solely to the SEC. Instead, it’s calling on Congress to set the foundation for how digital assets are governed. The exchange argues that lawmakers, not regulators, should define the boundaries and resolve existing uncertainties in the industry.

A Future with Tokenized Securities

But beyond classification, Coinbase is fighting for rules that support the growth of tokenized securities. It suggests targeted policy changes that go well with blockchain technology, potentially bringing out new financial opportunities and driving innovation in traditional markets.

Shirzad believes that addressing these key points will not only provide regulatory clarity but also accelerate the adoption of blockchain-based finance, positioning the U.S. as a leader in the space.