“Coinbase Files Mandamus Petition Against SEC for Rulemaking Clarity“
Coinbase, a leading digital asset platform, has taken action against the Securities and Exchange Commission (SEC) by filing a mandamus petition in the U.S. Court of Appeals for the Third Circuit. The purpose of this petition is to compel the SEC to address Coinbase’s long-pending request for rulemaking, which has been pending since July 2022. Coinbase is seeking clarification on how federal securities laws apply to digital assets such as cryptocurrencies and non-fungible tokens (NFTs). The company argues that existing regulations lack clarity and relevance in today’s rapidly evolving landscape.
Coinbase claims that the SEC has effectively denied its rulemaking request by pursuing enforcement actions against digital asset firms without providing any formal regulations. To address this issue, the court has ordered the SEC to submit an additional brief clarifying their decision on Coinbase’s request. The court also asked why it should not establish a deadline for granting or denying the request or order periodic reports.
In response, Coinbase has urged the court to grant mandamus and direct the SEC to take action within 30 days. The company argues that the SEC’s report is merely a bureaucratic performance and confirms that the agency has no intention of fulfilling Coinbase’s request. Coinbase supports its argument by referring to recent statements made by the SEC Chair and other officials, stating that existing regulations adequately cover digital assets. The company also highlights recent enforcement actions taken by the SEC against firms operating in the digital asset sector.
Coinbase states that the digital asset industry is caught in an unprecedented Catch-22 situation. On one hand, the SEC requires registration or threatens legal action, while on the other hand, it fails to provide clear guidelines on when and how this registration is necessary. Coinbase points out that the SEC uses bureaucratic tactics to avoid judicial examination of its denial of action. If approved, Coinbase’s mandamus petition would enable a judicial review of the SEC’s lack of action and hold the agency accountable.
The company further argues that the SEC has no valid reason for further delay and possesses all the necessary information to make an official ruling on Coinbase’s request but has chosen not to do so without a court order. Coinbase believes that obtaining clarity on regulatory requirements is crucial for the digital asset industry’s growth and development.
Hot Take: Coinbase Seeks Clarity from SEC in Rulemaking Process
Coinbase’s decision to file a mandamus petition against the SEC demonstrates its commitment to seeking clarity on regulatory matters in the digital asset industry. The company argues that existing regulations lack relevance and fail to keep up with the rapidly evolving landscape. By urging the court to grant mandamus, Coinbase aims to hold the SEC accountable for its lack of action and ensure a judicial review of the agency’s approach. This move could have significant implications for how digital assets are regulated in the United States. As the case unfolds, it remains to be seen how the court will respond and what impact it will have on Coinbase and other digital asset firms.
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