The developing battle between Coinbase, one of the biggest U.S. cryptocurrency trading platforms, and the Securities and Exchange Commission has me wondering what exactly the crypto people are hoping to achieve. If anything, their brazen approach seems likely to get them more of the regulation they’ve been seeking to avoid.
For a financial institution with a market value of more than $50 billion, Coinbase is so far remarkably free of regulation. The cryptocurrencies that trade on the exchange haven’t been classified as securities, which the SEC oversees, or as derivatives, which the Commodity Futures Trading Commission oversees. As a result, it doesn’t face the requirements for safety, soundness and investor protection that the regulators impose on exchanges under their purview.