As a result to the SEC’s arguments against its petition for a writ of mandamus, Coinbase Crypto exchange stated the financial regulating authority “is talking out of both sides of its mouth, and it is wrong at each end.” The cryptocurrency exchange’s chief legal officer Paul Grewal stated the mandamus as “the tailor-made remedy for the extraordinary facts.”
The long term dispute betwixt the cryptocurrency exchange and the market regulating authority is at the heart of the battle. The previous 30 days, Coinbase Crypto exchange sued the SEC, claiming that the latter failed to provide a response as the previous sought a formal notice-and-comment process that would enable the public to weigh in. The SEC thereafter responded, deeming Coinbase’s states to be “baseless.”
Coinbase Crypto exchange vs. SEC
In a 23-page filing to the Third Circuit of the United States Court of Appeals, the cryptocurrency exchange stated the SEC’s broad enforcement campaign on the same topic posed by Coinbase’s rulemaking petition renders the agency’s delay “unreasonable.”
Coinbase Crypto exchange claimed that mandamus is warranted and blamed the SEC for “making up its mind” to deny the petition. It likewise stated the Commission’s enforcement actions confirm that it is not seeing as Coinbase’s Petition.
The filing likewise cited that the SEC has instituted over 25 digital asset-related enforcement actions since the filing of the petition in July 2022.
“These actions presuppose that the agency believes the securities laws are clear and workable as applied to digital assets and that additional rulemaking is unnecessary. And a lot of these enforcement actions require the Commission to take positions on the central questions in Coinbase’s rulemaking petition, such as the standard for identifying whether a digital investment is a security.”
Coinbase Crypto exchange likewise hit back at the SEC, saying the latter’s argument that – regulated entities should wait to be sued – ignores its obligations to create whole lot of new legal standards through rulemaking and not enforcement.
SEC’s Earlier Response
After failed attempts to get a response from the SEC about its stance on proposing and adopting regulations to govern the regulation of securities that are offered and traded via digitally native methods, a United States court ordered the commission to respond to Coinbase’s complaint in 10 days.
The Commission then claimed that it is under no obligation to make available new regulations and also mentioned that Coinbase Crypto exchange has no standing to sue the agency. It likewise stated the digital investment industry already has regulations and regulations governing it.
