- Coinbase has taken the SEC to court for clear crypto rules.
- The SEC has asked the court to dismiss the case.
- Coinbase has reiterated its stance in the case seeking court intervention.
The fight for clear crypto regulatory guidelines in the United States continues to rage, with Coinbase at the frontline.
The crypto exchange in April dragged the U.S. 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 last week urged the court to deny Coinbase’s request to force it to respond to the rulemaking petition.
Coinbase, however, has no intentions of backing down, as revealed in a recent court filing.
Coinbase Maintains SEC Has Made Up Its Mind
Coinbase Chief Legal Officer Paul Grewal revealed that the crypto 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 crypto exchange reiterated its belief that the markets regulator had already decided to deny Coinbase’s petition, pointing at recent statements from SEC Chair Gary Gensler asserting that rules for the crypto industry already exist. The SEC in its arguments, notably described these claims as “baseless,” arguing that Gensler’s views did not represent the commission’s views.
Coinbase attorneys have begged to differ, arguing that the agency has treated statements from the Chair differently in other contexts.
"In enforcement actions, for example, the Commission has countered fair notice arguments by contending that public statements by the 'SEC Chairman repeatedly gave market participants notice.'" Coinbase attorneys highlighted.
The crypto exchange asserted that the SEC’s desire to pursue crypto 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 crypto exchange in its petition.
In summary, Coinbase has asked the court to issue a writ of mandamus, forcing the SEC to respond to its July petition in seven days or order the regulator 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. In addition, it has been favored to win by legal experts. Still, many also believe that the writ of mandamus case is a strategic ploy by Coinbase in preparation for an expected enforcement action from the SEC. The markets regulator served Coinbase with a Wells notice in March over several aspects of its business.
On the Flipside
Why This Matters
The confusing state of U.S. regulations is driving businesses abroad. Coinbase’s lawsuit seeking court intervention encapsulates the frustration of the industry.
Read this to learn more about the Coinbase v. SEC case:
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