tl;dr
Coinbase submitted a comment letter criticizing the US Securities and Exchange Commission's (SEC) cost-benefit analysis of a proposed rule. The letter argued that the SEC failed to assess the rule's economic impact on efficiency, competition, and capital formation, especially in relation to decentra...
Coinbase Challenges SEC's Proposed Rule Coinbase has criticized the SEC's cost-benefit analysis of a proposed rule, citing flaws and a lack of essential information on DEXs.
The letter argued that the SEC failed to assess the rule's economic impact on efficiency, competition, and capital formation, especially in relation to decentralized exchange (DEX) operations.
Coinbase urged the SEC to withdraw the proposal and redo it after conducting thorough research, highlighting the negative impact on smaller DEXs, potentially pushing them out of the market due to high compliance costs.
The letter also questioned the validity of the rule's cost analysis, emphasizing the impact on efficiency and capital formation.
Coinbase's chief legal officer stated that the SEC's approach is arbitrary and irrational, calling for a withdrawal of the proposal and a comprehensive redo after thorough research.
The letter also criticized the SEC for failing to gather essential information on DEXs, making unjustified assumptions, and relying on inconsistent approaches that create uncertainty for industry participants and courts.
Coinbase also highlighted the rule's negative impact on smaller DEXs, potentially creating an unfair advantage for larger incumbents, and questioned the validity of the rule's cost analysis.