Coinbase, one of the largest cryptocurrency exchanges in the United States, is intensifying its efforts to elicit a response from the U.S. Securities and Exchange Commission (SEC) regarding its rulemaking petition. This move follows a series of legal disputes between the two parties over the past year.
In its latest endeavor, Coinbase has formally requested a mandamus, seeking to compel the SEC to provide a response to its rulemaking petition, which was submitted in July 2022, within a 30-day period. The exchange aims to secure a clear approval or denial of its petition.
Coinbase’s Push for a 30-Day Deadline
In an October 13 court filing, Coinbase emphasized that the 30-day ultimatum is intended to prompt an official response from the SEC. The company argues that the SEC might engage in avoidance and delay tactics if not compelled to act.
Coinbase stated, “The SEC’s and its officials’ words and deeds outside this proceeding have only further confirmed that the agency has denied Coinbase’s petition in all but name.”
Paul Grewal, Coinbase’s Chief Legal Officer, criticized the SEC’s response as lacking clarity, characterizing it as bureaucratic procedure rather than substantive engagement. Grewal expressed frustration, saying, “The SEC’s unilluminating ‘update’ is mere bureaucratic pantomime and confirms that nothing short of mandamus will prompt the agency to take its obligations seriously.”
Ongoing Legal Confrontation
The recent court application by Coinbase is part of the ongoing legal conflict between the exchange and the SEC. Over the past year, both parties have been involved in various legal actions against each other, including an accusation by the SEC that Coinbase violated securities laws with its cryptocurrency offerings.
Coinbase responded by seeking to dismiss the case, arguing that the lack of regulatory clarity in the evolving cryptocurrency industry made it challenging to comply with existing securities laws.
The SEC’s Response
On October 11, Grewal shared an update from the SEC on social media, indicating that the regulator claimed its staff had “provided a recommendation” to it regarding Coinbase’s petition. However, the SEC’s update did not offer further details about these recommendations.
Grewal expressed frustration with the SEC’s response, stating that a formal, public answer to the petition was long overdue. He also called on the SEC to provide a timeline for its decision, especially considering the regulator’s ongoing enforcement actions against crypto-related firms.
Coinbase’s original petition sought clarification from the SEC on how securities laws apply to digital assets, highlighting the need for regulatory clarity in the cryptocurrency space. The exchange’s continued efforts to obtain a clear response from the SEC reflect the broader challenges faced by the cryptocurrency industry in navigating regulatory compliance and oversight.
