The Chief Legal Officer of Coinbase, Paul Grewal, has written a post on Twitter in which he explains why cryptocurrency projects put in a lot of effort to avoid the risk of being incorrectly classified as “securities” in the United States. He said that the reason for this is because having a security comes with criteria that are now incompatible with cryptography.
In July, Coinbase submitted a petition for rulemaking in which it outlined the ways in which presently applicable securities regulations are ineffective for cryptocurrencies. The company formally requested that the SEC write rules that would enable the expansion of a thriving and properly regulated securities market.
They asked fifty specific questions that the corporation feels would assist and offer a road map for future regulation, and they recommended that we would follow up with some possible solutions.
Paul Grewal said:
“Our comment identifies key problems that limit the ability of developers to offer crypto securities, and articulates what information investors would need to know about these projects.”
Coinbase provided an explanation as to the reasons why these types of securities, which are referred to as investment contracts under the law, are fundamentally distinct from the types of securities for which the laws that are now in place were designed. In addition, they describe how something like this structure may be laid up.
“We think crypto and crypto investors deserve the same kind of high-quality regulation that all other types of assets in the U.S. enjoy,” said Coinbase.
When it comes to global financial markets, the United States consistently ranks at the top. That’s thanks in large part to the diligent work of the agencies charged with policing the markets and the high standards they’ve set for themselves, says Coinbase.