Nasdaq-listed cryptocurrency exchange Coinbase has accused the U.S. Securities and Exchange Commission (SEC) of making decisions regarding alleged legal violations "on the fly."

In a video addressing the cryptocurrency industry, SEC Chairman Gary Gensler stressed the importance of regulatory compliance rather than a lack of regulatory clarity.

The UK Treasury’s taxation arm, HM Revenue and Customs, is seeking input on possible changes to the tax treatment of decentralized finance (DeFi) lending and borrowing transactions.

Top stories in the Crypto Roundup today:

• Coinbase Pushes Back Against SEC’s Potential Lawsuit
• Gensler Stresses Regulatory Compliance Over Clarity in Crypto Debate
• UK Treasury Seeks Input on Tax Changes for DeFi Transactions
• Crypto Market Movers – RNDR, CTSI, BLUR

Coinbase Pushes Back Against SEC’s Potential Lawsuit

Nasdaq-listed cryptocurrency exchange Coinbase has accused the U.S. Securities and Exchange Commission (SEC) of making decisions regarding alleged legal violations "on the fly."

The San Francisco-based crypto exchange has responded to a Wells Notice, which is a formal warning from the SEC's Enforcement Division that may recommend a lawsuit against the company. In its response, it notes that the “threat of imminent litigation appears to be intended to pressure Coinbase to accept demands that the Commission simply does not have the authority to order.”

Coinbase also argues that the cryptocurrencies it lists are not securities, contrary to claims repeated by SEC Chairman Gary Gensler that most digital assets are securities under federal law.

The exchange has maintained that it consistently addressed the SEC's questions about the securities status of listed assets. It also rebuts the SEC's allegations that it is operating as a national securities exchange, brokerage, and clearinghouse simultaneously.

Coinbase already owns both a broker-dealer and alternative trading system (ATS), but needs SEC and Financial Industry Regulatory Authority (FINRA) approval to operate them.

The exchange has in the past asked a number of questions of the SEC, including about its asset listing process, the Wallet product and its staking services. The SEC has now alleged that all three of these types of products may be in violation of securities laws, despite raising no concerns at the time.

Gensler Stresses Regulatory Compliance Over Clarity in Crypto Debate

In a video addressing the cryptocurrency industry, SEC Chairman Gary Gensler stressed the importance of regulatory compliance rather than a lack of regulatory clarity.

Using a metaphor of labelling a dog as a goldfish to avoid leash laws, Gensler explained the crypto industry's compliance challenges and emphasized that companies offering securities to American investors must adhere to American regulations, regardless of whether they operate onshore or offshore.

Gensler’s words come at a time in which tensions are high between the cryptocurrency industry and the SEC, with the regulator having sent crypto exchange Coinbase a Wells notice and sued Bittrex, even as it leaves the country.

Coinbase is now suing the SEC as it seeks clearer regulations. Before filing the lawsuit, Coinbase had acquired a license to operate in Bermuda and had previously requested the SEC to clarify digital asset rules last year.

Gensler made it clear that all securities exchanges, clearinghouses, brokers, and dealers are required to comply with existing regulations, register with the SEC, and provide necessary disclosures.

UK Treasury Seeks Input on Tax Changes for DeFi Transactions

The UK Treasury’s taxation arm, HM Revenue and Customs, is seeking input on possible changes to the tax treatment of decentralized finance (DeFi) lending and borrowing transactions.

Through a public consultation, which runs until June 22, HM Revenue and Customs aims to establish a framework that better aligns the taxation of cryptocurrency assets used in DeFi transactions and simplifies compliance.

Under the proposed changes, crypto used in DeFi transactions would not be treated as a disposal for tax purposes, avoiding a Capital Gains Tax event. Instead, this tax would only apply to non-DeFi transactions.

The consultation notes a transaction has to meet specific criteria to be considered a DeFi transaction, including involving the initial transfer of crypto assets from a lender to a borrower, or through a smart contract, with the borrower being obligated to return the tokens.

Crypto Market Movers – RNDR, CTSI, BLUR

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

Blur (BLUR) - Blur is a community-driven NFT marketplace that aims to empower NFT traders and collectors. It launched in October 2022 and is built on Polygon a scaling solution for Ethereum, and offers an NFT aggregator that sources NFTs from various platforms.

Cartesi (CTSI) - Cartesi provides a Linux runtime environment for scalable blockchain Dapps. Complex and intensive computations run off-chain while retaining the security guarantees of the blockchain.

Render token (RNDR) - The Render Network is designed to connect users looking to perform render jobs with people who have idle GPUs to process the renders. Owners would connect their GPUs to the Render Network in order to receive and complete rendering jobs using OctaneRender.

 

State of the Crypto by Top Tier Exchange Volume

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