- In a writ of mandamus, Coinbase Crypto exchange has accused the SEC of not acting towards creating cryptocurrency rules.
- Coinbase Crypto exchange is looking for the courts to order the SEC to change its stance.
- The SEC maintains that there are already regulations for cryptocurrency – they fall under securities law.
The battle betwixt the SEC and the cryptocurrency industry in the United States is starting to peak, with Coinbase Crypto exchange emerging as the champion for those influenced by regulatory authorities. In a new court filing, the major exchange made damaging accusations against the SEC.
Coinbase Crypto exchange has repeatedly sought clarity on the SEC’s mandate to create a framework for cryptocurrency regulation. Nonetheless, in the latest filing to the Third Circuit of the United States Court of Appeals, the exchange has condemned the agency as “the SEC Chair persists to state publicly that there will be no rulemaking.”
Airing Out the Laundry
The filing falls as a writ of mandamus – a judicial remedy from a court to any Government authority to do some specific act – as Coinbase Crypto exchange continues seeking an answer for its “petition for rulemaking,” filed last July. This petition requested the agency to propose and adopt digital investment securities rules.
Coinbase Crypto exchange feels the writ of mandamus is warranted owing to 3 arguments that it outlines.
Coinbase Crypto exchange maintains that:
- The SEC Chair persists to state publicly that there will be no rulemaking.
- The SEC’s enforcement actions confirm that it is not seeing as Coinbase’s petition.
- The SEC has ignored other cryptocurrency industry petitions for years.
Clearly, Coinbase Crypto exchange thinks that the SEC is purposefully dragging its heels on creating formal regulations and regulations rather than sticking to a process of “regulation by enforcement.”
“ Regulations Already Exist”
Regardless of the arguments and instances provided by Coinbase Crypto exchange, the SEC and its Chair, Gary Gensler, are equally adamant that regulations are in place.
Gensler spoke at the House Appropriations Subcommittee on Financial Services and General Government on March 29, stating:
“The regulations essentially already exist, sir. They’re was known securities regulations, and so there are disclosure regulations for when somebody tries to raise money from the public,” Gensler said.
This clearly outlines the SEC’s approach to cryptocurrency, where it believes almost all coins would be considered securities and thus be regulated under existing laws.
The other side
- The battle betwixt the SEC and Coinbase Crypto exchange is ongoing, but it can potentially lead to the United States exchange looking to other shores for its operations.
Why This Matters
If the SEC persists to hold all cryptocurrencies to securities laws, it will be tough for cryptocurrency corporations to flourish in the United States, especially with other countries setting up friendly frameworks.
Read more about the SEC’s pressure on Coinbase:
SEC’s Response Spurs Calls for Coinbase Crypto exchange to Leave the U.S.
Read more about how the United Kingdom is looking to regulate crypto:
Cryptocurrency Treated Like Gambling or Stocks? United Kingdom Regulatory authorities Divided