In respect to Coinbase’s demand for explicit cryptocurrency regulation, the United States Securities and Exchange Commission (SEC) has now delivered a formal statement in court, noting that any rule-making might take years and that enforcement activities would continue in the interim.
On April 27, the exchange made public its complaints against the American financial watchdog and disclosed that it had begun legal actions against the watchdog. The central tenet of their case was that the SEC had failed to respond to a petition that had been submitted in July of 2022. The petition requested that the SEC provide clarification as to whether or not the already in place regulatory frameworks for securities should be extended to include Cryptocurrency.
Coinbase’s preference for faster or different regulatory action by the commission does not entitle it to extraordinary relief from this court, the petition should be denied.
SEC’s lawyers in the filing
According to court filings that were submitted on May 15, the SEC stated that it is not under any responsibility to satisfy the standards that Coinbase listed in its petition. The SEC also noted that the company has asked for a very complicated set of changes and rule-making in an unreasonably short length of time.
Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe. 1/7
— paulgrewal.eth (@iampaulgrewal) May 16, 2023
Paul Grewal, Chief Legal Officer of Coinbase, said in a Twitter thread that the submission may be the first time the securities regulator has outlined its thoughts on whether or not the SEC should make regulations for the cryptocurrency sector. In addition to that, he said that there was a great deal more information that needed to be clarified.
