Coinbase Takes Bold Stand in SEC Lawsuit, Urges Court Action

Coinbase Takes Bold Stand in SEC Lawsuit, Urges Court Action

Coinbase continues to fight for clear crypto regulatory guidelines in the United States by dragging the SEC to court, seeking a response to a July 2022 petition for clarity on what digital assets constitute securities, despite the SEC urging the court to deny Coinbase’s request to force it to respond to the rulemaking petition.

  • Coinbase Crypto exchange has taken the SEC to court for clear cryptocurrency rules.
  • The SEC has requested the court to dismiss the case.
  • Coinbase Crypto exchange has reiterated its stance in the case seeking court intervention.

The fight for clear cryptocurrency regulatory guidelines in the  United States persists to rage, with Coinbase Crypto exchange at the frontline.

The cryptocurrency exchange in April dragged the United States Securities and Exchange Commission to court seeking a “yes or no” response to a July 2022 petition for clarity on what digital assets constitute securities—the SEC past week urged the court to deny Coinbase’s request to force it to respond to the rulemaking petition.

Coinbase Crypto exchange, on the other hand, has no intentions of backing down, as revealed in a recent court filing.

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Coinbase Crypto exchange Maintains SEC Has Made Up Its Mind 

Coinbase Crypto exchange Chief Legal Officer Paul Grewal revealed that the cryptocurrency exchange had filed a response to the SEC’s arguments in a tweet on Monday, May 23.

In the shared filing dated May 22, the cryptocurrency exchange reiterated its belief that the regulator of the markets  had already decided to deny Coinbase’s petition, pointing at recent statements from SEC Chair Gary Gensler asserting that regulations for the cryptocurrency industry already exist. The SEC in its arguments, it’s worth noting that stated these states as “baseless,” arguing that Gensler’s views did not represent the commission’s views. 

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Coinbase Crypto exchange attorneys have begged to differ, arguing that the agency has treated statements from the Chair differently in other contexts.

"In enforcement actions,  for instance, the Commission has countered fair notice arguments by contending that public statements by the 'SEC Chairman repeatedly gave market participants notice.'"  Coinbase Crypto exchange attorneys highlighted. 

The cryptocurrency exchange asserted that the SEC’s desire to pursue cryptocurrency enforcement actions left no doubt of its decision to not engage in rulemaking for the industry, validating its request for a writ of mandamus. 

Coinbase’s attorneys further argue that even if the SEC has not decided on its petition, the court’s intervention was still required in light of the agency’s aggressive enforcement campaign regarding issues raised by the cryptocurrency exchange in its petition.

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In conclusion, Coinbase Crypto exchange has requested the court to make available a writ of mandamus, forcing the SEC to respond to its July petition in 7 days or order the regulating authority to explain its delay and offer a timeline for its response.

Judging by statements from the SEC chair, the agency will likely not change its stance in the case. Additionally, it has been favored to gain  by legal specialists. Still, numerous likewise believe that the writ of mandamus case is a strategic ploy by Coinbase Crypto exchange in preparation for an expected enforcement action from the SEC. The regulator of the markets  served Coinbase Crypto exchange with a Wells notice in March over plenty of aspects of its business.

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The other side

Why This Matters

The confusing state of United States regulations is driving enterprises abroad. Coinbase’s lawsuit seeking court intervention encapsulates the frustration of the industry.

Read this to learn more about the Coinbase Crypto exchange v. SEC case:

How the SEC’s Response Affects Coinbase’s Case

Stay up to date on the Ledger controversy. Learn more:

Ledger Recovery Service Rollout Screeches to a Halt. Too Little Too Late?


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