Coinbase, one of the leading cryptocurrency exchange platforms, has intensified its efforts to obtain a timely response from the United States Securities and Exchange Commission (SEC) regarding its crypto rulemaking petition. The company is now seeking a court order, known as mandamus, that would force the SEC to provide a clear and definitive answer within 30 days. Here are the details..
Cryptocurrency exchange Coinbase took action again against the SEC
Coinbase first filed its rulemaking petition in July 2022, calling on the SEC to “propose and adopt rules” to regulate the cryptocurrency market. These rules will contain provisions that clearly define which crypto assets fall within the scope of securities classification. In an effort to speed up the process, Coinbase took legal action, forcing the SEC to give a clear “yes or no” answer. The SEC’s initial response on October 12 was met with disappointment from Coinbase. The commission did not provide further details regarding Coinbase’s petition, stating only that “commission staff made a recommendation.”
Expressing dissatisfaction with the SEC’s lack of transparency, Coinbase’s Chief Legal Officer Paul Grewal took to X (formerly Twitter) on October 13 to criticize the SEC for its delayed response and request a mandamus to force the commission to explain its position. Grewal also shared Coinbase’s official response to the SEC’s update, which was filed with the U.S. Court of Appeals for the Third Circuit. In this response, Coinbase called the SEC’s report “mere bureaucratic pantomime” and emphasized that a writ of mandamus was needed to ensure that the commission earnestly fulfilled its obligations.
Everyone wants regulatory clarity
The response emphasized the commission’s reluctance to address the issue, pointing out that it took more than a year and a court decision to get even a staff-level recommendation from the SEC. “The Commission has decided not to pursue the rulemaking requested by Coinbase and will use every bureaucratic trick in its arsenal to avoid judicial review as long as the Court permits,” the response said. The ongoing back-and-forth between Coinbase and the SEC has been marked by delays and regulatory resistance. At one point, the SEC requested 120 days to respond to the rulemaking petition. So he pointed to a response that would potentially come in late October or early November.
Coinbase’s efforts to provide regulatory clarity in the cryptocurrency market have met with challenges and resistance from the SEC. The outcome of this legal battle will have significant implications for the crypto industry, as it could help define how crypto assets will be categorized and regulated in the United States. While the industry eagerly awaits the SEC’s response, Coinbase remains at the forefront of the battle for greater regulatory transparency in the cryptocurrency space. The court’s decision on mandamus will be a pivotal moment in determining the regulatory future of cryptocurrencies in the United States.
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