Coinbase Request for Clarity on Crypto Rules ‘Should Be Denied’, Says SEC

The battle between crypto change Coinbase and the U.S. Securities and Alternate Fee (SEC) rages on.

The most recent twist occurred on Monday when the SEC sought a courtroom order to dismiss Coinbase’s plea for the company to make clear its stance on crypto laws.

The change publicly voiced its grievances towards the American monetary watchdog on April 27, additionally revealing that it had initiated authorized proceedings.

The crux of their argument was the SEC’s non-response to a petition filed in July 2022. The petition urged the SEC to make clear whether or not the present regulatory frameworks for securities ought to prolong to the cryptocurrency business.

Coinbase petitioned a federal decide to compel the regulator to reply.

The agency’s Chief Authorized Officer Paul Grewal expressed the corporate’s frustration in a Twitter thread final month.

“Coinbase doesn’t take any litigation flippantly, particularly when it is with one in every of our regulators,” he wrote. “But we, like different corporations within the business, are dealing with potential punitive actions from the SEC with out clear understanding of how the SEC interprets the regulation in relation to our enterprise.”

The SEC lastly responded on Monday, dismissing Coinbase’s request outright.

“Coinbase’s choice for quicker or totally different regulatory motion by the fee doesn’t entitle it to extraordinary reduction from this courtroom,” wrote the Fee’s legal professionals within the submitting. “The petition ought to be denied.”

Reacting to the SEC’s assertion, Grewal commented that it was “the primary time the SEC has transparently communicated its stance on setting guidelines for the crypto business.”

He additionally expressed disappointment on the SEC’s timeline for rule implementation and its obvious lack of urgency.

Grewal additional said that the SEC’s reply “reinforces Coinbase’s longstanding concern that our business doesn’t have readability on what the SEC could take into account to be inside or outdoors its jurisdiction at any time, and it’s prone to proceed altering its thoughts alongside the best way.”

He concluded by saying that Coinbase plans to reply formally to the SEC within the following week.

Coinbase versus the SEC

This incident provides a brand new chapter to the continuing battle between Coinbase and the SEC, which escalated in March when Coinbase obtained a Wells discover from the SEC.

This formal warning indicated the SEC’s intention to take authorized motion towards Coinbase.

The friction between Coinbase and the SEC might be traced again to 2021 when the SEC first warned it could sue the corporate over its plans to launch a lending product. The platform in the end shelved the product because of the menace of authorized motion.

Coinbase’s CEO, Brian Armstrong, has constantly criticized the shortage of regulatory readability, even suggesting that he would possibly transfer the corporate out of the US within the absence of a transparent SEC stance inside a number of years.