Shirzad asserts that Coinbase doesn't trade securities on its platform in response to the perennial query regarding how tokens are classified.
Although Gary Gensler, the chair of the Securities & Exchange Commission, has urged crypto exchanges to register with the organisation, Coinbase (COIN), the largest U.S. crypto exchange, has publicly said that, in their opinion, there is no way to do so.
Faryar Shirzad, the chief policy officer of Coinbase, said in an interview that despite our efforts, there is just no way to accomplish this. In fact, they filed a petition with the SEC back in June, outlining the particular problems that needed to be solved for crypto platforms to be allowed to register.
Shirzad claims that the SEC has not responded to its enquiries despite receiving a list of questions from the Commission asking how to register.
In a December interview, SEC Chair Gensler stated that his aim in regulating the cryptocurrency industry was to "bring these platforms, the exchanges, and the lending platforms into compliance."
"They can do that appropriately working with the SEC, or we can continue on the course with more enforcement actions," Gensler said at the time. "And I would have to say that the runway is getting shorter."
When asked if the SEC had consulted with cryptocurrency businesses about this procedure, Gensler responded:
"It really is on these entrepreneurs and business leaders in the crypto space."
But, in Shirzad's opinion, the SEC's discourse does not match the clarity provided to the industry executives mentioned by Gensler last year.
"When we ask specific questions: How do we get to a path to registration? There's never an answer," Shirzad said.
"We think the opportunity to build a crypto securities market in the United States is enormously exciting, but we've stayed away from it because there's no path to registration, and there's just no way to do it."
When questioned about the age-old debate over how to classify tokens, Shirzad insisted that Coinbase doesn't trade securities on its platform.
"Our exchange lists more than 200 assets in total. When we list an asset, we examine it to ensure that it is, among other things, free from fraud and cyber-resistant. But more crucially, Shirzad added, we determine whether the item has the potential to be considered as a security. We don't list it if it is."
The cryptocurrency exchange claimed in an amicus brief submitted on Monday that the digital assets listed by Coinbase are not securities in the case against a former employee accused by the SEC of insider trading and securities fraud for leaking details about future token listings on Coinbase.
But, Coinbase would prefer to list securities if the SEC provided appropriate guidelines and regulations. Shirzad claims that the SEC's Howey Test, which the Supreme Court established, is used by Coinbase to decide whether a certain contract should be classified as a security because it is an investment contract.
While the SEC is a potential contact point for Coinbase, the cryptocurrency exchange is also turning to Congress this year for what Shirzad anticipates will be "major activity towards legislation" in 2023.
"Both sides of the Capitol are very much of the opinion that we need a regulation around cryptocurrency, for cryptocurrency commodities, to create a spot market authority at the federal level for cryptocurrency securities to essentially encourage the SEC to provide the clarity that it hasn't itself provided," Shirzad said.
He said that based on his interactions with senators at Coinbase, he anticipates meaningful legislative activity to begin "quickly."
Maxine Waters, the ranking member of the House Financial Services Committee, told Yahoo Finance in an interview this week that stablecoin legislation is "ready to go" since both Democrats and Republicans have come to agreements on the majority of the outstanding concerns.
When we return to Congress in a few days, "I think the measure may be carried," Waters added.
Lets wait and see how this act influences crypto regulation.