SEC Refuses to Issue Clear Crypto Regulations, Says Coinbase

SEC Refuses to Issue Clear Crypto Regulations, Says Coinbase

Coinbase accuses the SEC of intentionally ignoring its petition for clear rules for the crypto industry and seeks a mandamus order to compel the agency to respond.

Coinbase accused the United States Securities and Exchange Commission (SEC) of deliberately ignoring its petition for adopting clear regulations for the cryptocurrency industry, despite the fact that the decision has not been made public.

In its latest filing to the Third Circuit of the United States Court of Appeals, Coinbase Crypto exchange likewise pointed to public comments previously made by SEC Chair Gary Gensler, saying that “the SEC’s and its Chair’s words and actions leave no doubt of the agency’s plans.”

Coinbase Crypto exchange sent the SEC its so- was known “petition for rulemaking” 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 “clarity and certainty regarding the regulatory treatment of digital investment securities.”

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The SEC, on the other hand, is is still to respond to the petition. Furthermore, within a congressional hearing in March, SEC Chair Gensler indicated that “ regulations essentially already exist” for cryptocurrency to be managed effectively under securities laws.

“The SEC has no intention of engaging in such a rulemaking in the foreseeable future, and that decision could be unreviewable indefinitely unless the Court grants Coinbase’s mandamus petition,” 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 “mandamus” is Latin for “we command.”

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Coinbase Crypto 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 exchange’s chief legal officer Paul Grewal saying on Wednesday that “we continue to appreciate the Court’s consideration.”

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The SEC, in its turn, sought to dismiss the action earlier these 30 days. The agency claimed that “mandamus is an extraordinary remedy—one that requires the petitioner to show a clear and indisputable right to relief.”

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“ Coinbase Crypto exchange does not and cannot demonstrate such a right,” the agency stated in its filing, adding that “no statute or regulation requires the Commission to take such action on a specific timeline.”

Prior to that, in March in the year, the SEC likewise announced a Wells notice to Coinbase Crypto exchange, alleging that the company’s staking products constitute unregistered securities and indicating a potential enforcement action against the exchange.

“The SEC’s threatened enforcement action against Coinbase Crypto exchange dispels any doubt,” the San Francisco-based company stated in its latest filing. “It is difficult to imagine a more direct rebuke of Coinbase’s rulemaking petition than a threatened suit against Coinbase Crypto exchange for allegedly listing unspecified digital investment securities according to unspecified legal standards, and failing to register under a registration path that does not is still exist.

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Reports by Coinbase Crypto exchange, “by effectively—but not is still formally—denying Coinbase’s rulemaking petition,” the regulating authority is preventing the company from exercising its right under the Administrative Procedure Act to challenge the SEC’s decision to forgo rulemaking.

In the end, Coinbase Crypto exchange indicated that “the SEC’s choice to regulate by enforcement was the root of the issue, not the solution.”

“The SEC’s 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 Coinbase’s petition,” stated the exchange.


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