Coinbase Takes Legal Action Against SEC’s Denial of Rulemaking Petition
Crypto exchange Coinbase has decided to take legal action after its request for rulemaking was denied by the U.S. Securities and Exchange Commission (SEC). In July 2022, Coinbase filed a petition with the SEC seeking a new regulatory framework for digital assets. However, the regulator rejected the proposal, stating that it disagreed with the notion that securities laws do not apply to the crypto industry.
SEC’s Response to Coinbase
In a letter dated December 15th, 2023, addressed to Coinbase, the SEC expressed its disagreement with the petition’s claim that existing securities statutes and regulations are unworkable in relation to crypto asset securities and intermediaries. The SEC also asserted its discretion to determine the timing and priorities of its regulatory agenda, including discretionary rulemaking.
Coinbase Seeks Court Assistance
In response to the SEC’s decision, Coinbase’s chief legal officer, Paul Grewal, announced on Twitter that the exchange is now seeking court assistance to review the regulator’s denial. Coinbase argues that the denial is arbitrary and capricious, an abuse of discretion, and a violation of the Administrative Procedure Act.
Requesting Court Intervention
In its petition for review, Coinbase asserts that the SEC’s refusal to engage in rulemaking while pursuing regulation through enforcement against Coinbase and others exceeds its statutory authority and goes against principles of fairness outlined in the Administrative Procedure Act. Coinbase is requesting that the court declare the SEC’s denial unlawful, vacate it, enjoin it, and direct the commission to commence rulemaking.
Hot Take: Coinbase Challenges SEC’s Denial
Coinbase has taken legal action after its request for a new regulatory framework for digital assets was denied by the SEC. The exchange argues that the denial is arbitrary and capricious, violating the Administrative Procedure Act. By seeking court intervention, Coinbase hopes to overturn the SEC’s decision and compel the commission to commence rulemaking. This legal battle highlights the ongoing struggle between crypto companies and regulators over the appropriate regulatory framework for digital assets. The outcome of this case could have significant implications for the crypto industry as a whole.
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