Coinbase Continues to Pressure SEC About Crypto Rulemaking

Coinbase share prices surged by 43% in the past month, and the exchange continues to pressure the SEC about clear crypto regulation.

Coinbase has once again urged the SEC to establish clear regulations for the crypto industry. In response to the SEC's letter indicating an intention to provide a status report on Coinbase's petition for crypto regulations, Coinbase referenced the recent SEC lawsuit against Kraken as evidence for the need for regulation. Despite regulatory scrutiny on other exchanges, Coinbase's shares have surged by 43% in the past month. Additionally, Coinbase CEO Brian Armstrong's involvement in ResearchHub, a project aiming to revolutionize scientific publishing with cryptocurrency incentives, is gaining traction and value.

Coinbase Speaks up About Crypto Rulemaking

Coinbase , a cryptocurrency exchange headquartered in the U.S. has once again urged the Securities and Exchange Commission (SEC) to provide a response to its request to create rules and regulations for crypto. Coinbase even cited the recent enforcement action taken against another large exchange, Kraken, as supporting evidence for its argument.

On Nov. 22, in a submission to the U.S. Court of Appeals for the Third Circuit, legal representatives for Coinbase responded to a letter from the SEC dated Nov. 21 In the SEC's letter, they indicated their intention to provide a status report regarding Coinbase's petition for cryptocurrency regulation rules by Dec. 15.

The exchange’s response to the SEC specifically referenced the regulatory body’s latest lawsuit that was filed against Kraken. In this action, the SEC accused Kraken of mixing customer funds and not registering as a securities exchange, broker, dealer, or clearing agency. Notably, the letter from Coinbase did not make any mention at all of the settlement of civil and criminal cases against the prominent cryptocurrency exchange Binance, which occurred on Nov. 21.

Coinbase had initially filed a petition in July of 2022, urging the SEC to formulate and implement clear regulations governing securities traded using digital-native methods. However, communications from both sides hinted at possible delays in the process.

Silver Lining for Coinbase

As most of the other large exchanges in the cryptocurrency industry are currently under the SEC’s microscope, things are going rather well for Coinbase. In just the past few days, Coinbase (COIN) shares experienced a surge as crypto investors withdrew from exchanges like Binance.

Coinbase's closing performance yesterday is attracting a lot of attention, particularly in light of recent data that reveals a significant capital outflow of about $956 billion from Binance, a prominent rival in the cryptocurrency exchange space. This mass exodus follows the recent legal settlement involving Binance's CEO, Changpeng "CZ" Zhao, who pleaded guilty to charges brought forth by the U.S. Justice Department. These charges mainly revolve around allegations of facilitating illicit activities on the platform.

Coinbase is currently hovering near its highest valuation for the year, a development that raises anticipation about its year-end closing figure. In fact, Coinbase has witnessed an impressive 43% surge in its value over the past month alone. It is also worth noting that the spike in Coinbase’s performance was not necessarily linked to a rise in the price of Bitcoin (BTC). The price of the market leader is only up by about 8% in the past thirty days.

Coinbase CEO’s Other Project Also Performing Well

A few months ago, there was a lot of excitement worldwide about the alleged discovery of alien mummies in Mexico City. During this time, Patrick Joyce, one of the co-founders of ResearchHub, along with other members of the ResearchHub team, very quickly offered a collective reward of 42,500 ResearchCoins (RSC) to anyone willing to conduct tests on the DNA samples extracted from these "aliens."

The combined value of these crypto bounties was about $660 at the time they were first announced. However, due to a recent 1,000% increase in their value, they are now worth $7,400. Once again, there is speculation that Binance’s woes are Coinbase’s gains as the CEO of Coinbase, Brian Armstron, is the chief executive of ResearchHub.

Although the analyses conducted on the bodies did not disprove their extraterrestrial origin, the researchers were still compensated with 8,000 RSC. When they were given to the researchers, the tokens were collectively worth $140, but now they are worth approximately $1,100.

According to Armstrong, ResearchHub could be the perfect solution to gatekeepers in the research industry. In fact, the CEO believed in the project so much that he has been selling 2% of his Coinbase stake to fund ResearchHub.

Armstrong points out that scientific journals have long been lucrative, often benefiting from free research paper submissions (and sometimes even charging for publication), while imposing high subscription costs that can amount to thousands of dollars a year. This system is very often criticized for its sluggishness and potential for discrimination and exploitation.

In response, ResearchHub seeks to revolutionize the science publishing landscape by introducing an ERC-20 token and embracing open-source principles. Their vision includes compensating academics in cryptocurrency for reviewing papers, rewarding researchers with crypto for their contributions, offering crypto bounties to incentivize research in important matters, and granting cryptocurrency incentives for actively participating in discussions that advance meaningful scientific inquiry. Overall, Armstrong wants this innovative approach to reshape the incentives and accessibility of scientific publishing.

The ResearchHub platform is often compared to a GitHub for scientists, but in practice, it resembles Reddit in its user interface and interaction style. On ResearchHub, users have the opportunity to earn small amounts of RSC by taking part in activities like sharing research paper PDFs (provided there are no copyright issues), participating in discussions by posting comments, peer-reviewing scientific papers, or receiving tips from fellow users.

Overall, Coinbase has escaped the SEC’s latest witch hunt relatively unscathed considering how well its shares are performing. Coinbase’s CEO also now seems to have a Midas touch when it comes to some of the other projects he is involved with. Some people even consider Coinbase to be sort of a “winner” after what has been happening with other exchanges in the industry.