An important part of the SEC's responsibility is determining how assets should be distributed, Gensler said. He noted that the cryptocurrency market is small compared to the rest of the capital markets overseen by the agency.
"While the cryptocurrency market faces fraud, abuse and non-compliance out of proportion to its size, it represents a small fraction of a capital market worth more than $110 trillion." It is important that the Commission reserves the right to focus on these areas. Capital markets need updated rules," Gensler said.
Coinbase did not immediately respond to a request for comment.
Republican commissioners Hester Pierce and Mark Ueda said Friday they disagreed with the agency's decision, adding that it should engage in dialogue that could lead to guidelines or regulations.
"We recognize that the Commission has broad discretion in setting the timelines and priorities of its regulatory agenda," they said. "In our view, the petition raises issues related to new technologies and other innovations, and addressing these important issues is an important part of the role of a responsible regulator."
"Any inquiry on these issues should include public roundtables, draft presentations and requests for feedback, which would give us the opportunity to hear from a wide range of market participants and other stakeholders," they said.
Updated at 10:40 a.m. ET with full details
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