US cryptocurrency exchange Coinbase has petitioned the country’s securities regulator to clarify regulations surrounding the trading of digital assets.

In its petition, Coinbase also requested that the Securities and Exchange Commission provide rules to identify which digital assets it considers to be securities. 

The petition defines “digitally native securities” as being “recorded and transferred using distributed ledger technology,” without reliance on centralized certified forms of ownership that typically characterize traditional financial instruments. Additionally, transactions are “executed and settled in real-time, permanently recorded on blockchains, and visible with equal access to all market participants.” 

Due to these definitive characteristics, classifying a “paradigm shift from existing market practices,” the petition argues that many of the Commission’s rules governing traditional assets are “both incomplete and unsuitable.” Consequently, the petition declares that “the U.S. does not currently have a functioning market in digital asset securities due to the lack of a clear and workable regulatory regime.”

In addition to matters of classification, Coinbase also offered a list of questions that it said the SEC should consider and seek public consultation on.

According to the SEC, under current Chair Gary Gensler, most digital assets qualify as securities and accordingly require registration with the authority. Presently, it has refused to positively identify each token that fits the securities definition, arguing that it also neglects to do this for other markets.

Yet, some nine tokens have been labeled as securities by the regulator. Among the nine tokens identified, the largest is an Ethereum-based token called Amp, with a market value of about $700 million, according to CoinGecko. The tokens were revealed in a complaint filed this week, accusing Former Coinbase product manager Ishan Wahi, his brother, and a friend of insider trading. 

“In nearly a year, the defendants collectively earned over $1.1 million in illegal profits by engaging in an alleged insider trading scheme that repeatedly used material, nonpublic information to trade ahead of Coinbase listing announcements,” according to a statement from  Carolyn M. Welshhans, Acting Head of the SEC’s Crypto Assets Unit.

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The post Coinbase Petitions SEC to Clarify Crypto Rules appeared first on BeInCrypto.

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