Coinbase submitted its 3rd remark missive highlighting important flaws successful the US Securities and Exchange Commission’s (SEC) cost-benefit investigation of the projected rule. The missive argued that the bureau has failed to measure the rule’s economical interaction connected efficiency, competition, and superior formation.

Despite acknowledging a deficiency of captious accusation connected decentralized speech (DEX) operations and compliance costs, Coinbase said the SEC has projected vague benefits that whitethorn not materialize, particularly if DEXs are driven retired of the US market.

SEC Rulemaking Under Fire

The writer of the letter and Coinbase’s main ineligible officer, Paul Grewal, stated that the SEC should retreat the connection and redo it aft conducting thorough research.

The crypto exchange’s missive besides stated that the SEC has failed to fulfill its statutory obligations by not gathering indispensable accusation connected DEXs, admitting gaps successful knowing cardinal aspects of their operation, and making unjustified assumptions based connected non-DEX entities.

Coinbase exec argued that the regulatory entity’s attack is arbitrary and irrational, arsenic DEXs run fundamentally otherwise and would look prohibitive compliance costs.

It further stated that the SEC cannot accurately measure the costs and benefits of the projected changes without clarifying erstwhile integer assets are classified arsenic securities. The agency’s inconsistent approach, relying connected case-by-case litigation alternatively than wide rules, has led to uncertainty for manufacture participants and courts.

Meanwhile, the projected changes person exacerbated this uncertainty, stating ambiguously that integer assets whitethorn oregon whitethorn not beryllium securities. This vagueness undermines the reliability of the cost-benefit investigation arsenic per Coinbase.

Small DEXs astatine Risk

Coinbase besides weighed successful connected the rule’s antagonistic interaction connected its services, similar the Base web and its wallet offerings, by perchance pushing DEXs retired of the market. Smaller DEXs would beryllium disproportionately affected owed to precocious compliance costs, creating an unfair vantage for larger incumbents. The proposal’s vague connection adds to the compliance burden.

The SEC has antecedently recognized specified appraisal costs but ignores them here, further questioning the rule’s outgo investigation validity.

The station Coinbase Blasts SEC’s Arbitrary Approach to DEX Compliance appeared archetypal connected CryptoPotato.