Who’s Afraid of Gary Gensler? Coinbase Braces for Battle

If it wasn’t clear enough already that SEC Chairman Gary Gensler views most tokens as securities from many times he has he said that, two weeks ago, the Securities and Exchange Commission started walking instead of just talking. He. She Accused A former product manager at Coinbase with insider trading, and in complaint List nine specific symbols as unregistered securities.

It seems to me to be the biggest crypto news of the summer so far, with broad implications for the industry.

The nine symbols are AMPgathering (RLY), DerivaDEX (DDX), XYORari Governance Token (RGT), 60Powerledger (Power), DFXand color (Except). The first seven are listed on Coinbase for trading. (DFX and KROM in an internal Coinbase spreadsheet were tokens I had planned to include, but never did.)

The nine projects behind these tokens have been conspicuously silent in response to the Securities and Exchange Commission (SEC) petting them. Coinbase did not.

Queen Piece blog reply retort From the chief legal officer Paul Grewal Titled “Coinbase Doesn’t List Securities. End of Story.” Grewal writes, “None of these assets are considered securities. Coinbase has a rigorous process of analyzing and reviewing each digital asset before it is made available on the exchange… This process includes an analysis of whether the asset can be considered as Safety. “

But of course, that’s not the end of the story. This is just the beginning. Gensler wouldn’t say, “Oh, don’t worry, Coinbase says it’s not a security.”

Binance, in response to the SEC’s token list, cross out AMPIt is the only one of the nine companies listed on Binance US. She said she was doing so out of “extreme caution”. This was an effective phishing of rival Coinbase, which could not afford to remove any of the tokens.

The last time the SEC came after Coinbase for a specific product or asset was a year ago, when it was threatened to sue If Coinbase goes ahead with its planned high-return lending offering. At the time, Ripple CEO Brad Garlinghouse, who has been battling the SEC since 2020, tweeted about the “Die Hard” meme on Coinbase CEO Brian Armstrong:Welcome to the party, pal. “Mark Cuban as Armstrong urged to”Go on the attack. “

But 13 days after the SEC threat, Coinbase and . have surrendered drop product.

This time, the company can’t back down so quickly. A source at Coinbase told me that deleting the token would “undermine our entire position.”

On the same day, the Securities and Exchange Commission classified nine securities, Coinbase presentedPetition to set the rules“The agency is calling for a new regulatory framework for digital assets. Coinbase’s rival FTX wants the same thing; all exchanges are doing so.

In an interview with FTX CEO Sam Bankman-Fried on Friday for the next episode of our site gm . podcastI asked about the nine tokens.

“What I would most like to see are the regulatory frameworks, registration model frameworks, and exits for both platforms and assets, and I am optimistic that over the next year we will see some from multiple agencies,” he said. “It doesn’t mean you can’t make decisions in the meantime. It doesn’t put you in a situation where it is impossible to judge what anything is… and it is very intentional that we have listed fewer tokens on FTX US than many platforms.”

This seems like a touch of shadow for Coinbase to list so many tokens in the first place, a strategy that has brought the company a lot of criticism for opening its doors to a lot of “shitcoins.” But now Coinbase must stand by its approach and challenge Gensler on behalf of its peers.

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