Coinbase strikes back! Petitions Court to Force SEC to Clarify Cryptocurrency Regulations

Coinbase, the leading cryptocurrency exchange in the United States, officially launched a “counterattack” against the US Securities and Exchange Commission (SEC) on Monday (24th), requesting the federal court to force the SEC to respond to Coinbase’s request for “clarifying cryptocurrency regulations.”

Coinbase sent a so-called “rulemaking petition” to the SEC in July last year, asking the SEC to propose and adopt rules for “digital asset securities.” Regulatory clarity and clarity”.
Some of the questions focused on the SEC’s approach to classifying certain tokens as securities, and others focused on issues such as asset custody and SEC-regulated exchanges trading crypto asset securities.

Under the Administrative Procedure Act, the SEC must deal with Coinbase’s petition within a “reasonable period of time,” but after nine months the SEC still has not responded, Coinbase concluded that the “reasonable period of time” has passed, the people said. .

Coinbase’s petition argues that addressing these concerns and establishing new regulations for digital asset securities would benefit the health of U.S. capital markets. Content display:

Due to the lack of clarity and a viable regulatory regime, the United States currently does not have a well-functioning digital asset securities market. New regulations promoting the use of digital asset securities will allow for more efficient and effective allocation of funds in financial markets.

People in the industry generally believe that even if the SEC finally responds to the petition, it may only say that “the authorities do not believe that new regulations are necessary”, echoing the previous statement of SEC Chairman Gary Gensler. He stated at a congressional hearing last month:

Rules for cryptocurrencies actually exist and can be effectively administered under securities laws.

But if the SEC’s response to Coinbase’s petition doesn’t mention new rules, that would give Coinbase the chance to challenge the SEC in court, the sources said.

“We are simply asking the court to order the SEC to respond, which they have a legal obligation to do,” Paul Grewal, Coinbase’s general counsel, said in a blog post.

The latest challenge launched by Coinbase comes at a time when U.S. regulators such as the SEC and the Commodity Futures Trading Commission (CFTC) are scrutinizing and frequently cracking down on digital asset companies.