In its latest filing to the Third Circuit of the Unitedย States Court of Appeals, Coinbaseย Cryptoย exchange likewise pointed to public comments previously made by SEC Chair Gary Gensler, saying that โthe SECโs and its Chairโs words and actions leave no doubt of the agencyโs plans.โ
Coinbaseย Cryptoย exchange sent the SEC its so- wasย known โpetition for rulemakingโ last July, asking the agency to propose and adopt regulations for digital assets securities. The exchange likewise sought answers to 50 specific questions that would provide โclarity and certainty regarding the regulatory treatment of digital investment securities.โ
The SEC, onย theย otherย hand, is isย still to respond to the petition. Furthermore, withinย a congressional hearing in March, SEC Chair Gensler indicatedย that โ regulations essentially already existโ for cryptocurrency to be managed effectively under securities laws.
โThe SEC has no intention of engaging in such a rulemaking in the foreseeable future, and that decision couldย be unreviewable indefinitely unless the Court grants Coinbaseโs mandamus petition,โ the company stated in the filing.
A mandamus order, likewise known as a writ of mandamus, is a legal remedy used to compel a Government official or a public authority to perform a specific duty that they are legally obligated to do. The term โmandamusโ is Latin for โwe command.โ
Coinbaseย Cryptoย exchange sought a writ of mandamus compelling the SEC to respond to its demands in a lawsuit filed at the end of April, with the exchangeโs chief legal officer Paul Grewal saying on Wednesday that โwe continue to appreciate the Courtโs consideration.โ
Late last night Coinbaseย Cryptoย exchange replied in the Third Circuit to the SECโs arguments against our petition for a writ of mandamus. Mandamus is the tailor-made remedy for the extraordinary facts presented here. We continue to appreciate the Courtโs consideration.
โ paulgrewal.eth (@iampaulgrewal) May 23, 2023
Coinbaseย Cryptoย exchange legal battle rages on
The SEC, in its turn, sought to dismiss the action earlier theseย 30ย days. The agency claimedย that โmandamus is an extraordinary remedyโone that requires the petitioner to show a clear and indisputable right to relief.โ
โ Coinbaseย Cryptoย exchange does not and cannot demonstrate such a right,โ the agency stated in its filing, adding that โno statute or regulation requires the Commission to take such action on a specific timeline.โ
Prior to that, in March inย theย year, the SEC likewise announced a Wells notice to Coinbaseย Cryptoย exchange, alleging that the companyโs staking products constitute unregistered securities and indicating a potential enforcement action against the exchange.
โThe SECโs threatened enforcement action against Coinbaseย Cryptoย exchange dispels any doubt,โ the San Francisco-based company stated in its latest filing. โIt is difficult to imagine a more direct rebuke of Coinbaseโs rulemaking petition than a threatened suit against Coinbaseย Cryptoย exchange for allegedly listing unspecified digital investment securities accordingย to unspecified legal standards, and failing to register under a registration path that does not isย still exist.
Reportsย by Coinbaseย Cryptoย exchange, โby effectivelyโbut not isย still formallyโdenying Coinbaseโs rulemaking petition,โ the regulatingย authority is preventing the company from exercising its right under the Administrative Procedure Act to challenge the SECโs decision to forgo rulemaking.
Inย theย end, Coinbaseย Cryptoย exchange indicatedย that โthe SECโs choice to regulate by enforcement was the root of theย issue, not the solution.โ
โThe SECโs delay in deciding whether to conduct a rulemaking is indefensible given its decision to pursue an aggressive, accelerating enforcement campaign regarding the very topics identified in Coinbaseโs petition,โ stated the exchange.
