Paul Grewal

In its third letter to the SEC, the crypto exchange said it would withdraw the proposal, which was first released in 2022, and start over again.

Coinbase has submitted a new letter to the United States Securities and Exchange Commission (SEC) on that agency’s proposed changes to the definitions of a national securities exchange. This is the third comment letter from Coinbase and addresses the SEC’s cost-benefit analysis of its proposed changes.

The SEC lacks the necessary information to conduct a cost-benefit analysis and depends on irrational arguments in its place, Coinbase argues. The SEC should at least withdraw the proposal and start over again after it has done its research, the letter’s author, Coinbase chief legal officer Paul Grewal said.

A cost-benefit analysis is required for the proposal under the Administrative Procedure Act and Exchange Act of 1934, Grewal said. The letter went on to list the information that the SEC admits to not knowing, starting with the definition of a “crypto asset security” and the number of exchanges operating on the market, and concludes:

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