Coinbase Chief Legal Officer: Objections to the US SEC's expansion of the definition of an exchange

Paul Grewal, chief legal officer of Coinbase, posted on the X platform that Coinbase submitted an objection to the U.S. Securities and Exchange Commission (SEC) today regarding its proposal to expand the definition of "exchange". The SEC's proposal lacks key analysis, is based on unreasonable assumptions, does not prove the existence of problems that require regulation, and seriously exaggerates the benefits of the proposal. The following are the main concerns: 1. Lack of economic analysis: The SEC failed to collect basic information or conduct economic analysis to assess the impact of the proposal on decentralized exchanges (DEXs), but still promoted its unreasonable assumptions; 2. Potential impact on DEXs: Coinbase emphasized that the SEC should not extend the proposal to DEXs because it could have a significant impact on millions of Americans who use digital assets and could harm innovation in the growing DEX market. 3. The existence of a hypothetical problem: The SEC started from the assumption that there was a problem in the industry that needed to be corrected, but failed to prove the existence of the problem. Coinbase believes that this is not the right way to make rules, and the proposal should at least be withdrawn and corrected. Ongoing Dialogue with the SEC: Coinbase appreciates the SEC’s careful consideration of its comments and looks forward to further discussions on this important topic.