The U.S. Securities and Exchange Commission (SEC) has asked a judge to reject a request to force the agency to respond to a rulemaking petition filed by Coinbase last year, focused on how securities laws apply to cryptocurrency.
SEC Opposes Coinbase's Request
Coinbase, the largest crypto exchange in the US, filed a lawsuit for the ruling last month, alleging that the commission was not reasonable or quick to respond. The exchange has also requested a formal reporting and comment process to allow the public to comment.
The SEC responded in a court filing Monday by describing the claim that Coinbase had already made its decision as "baseless".
SEC Chairman Gary Gensler has repeatedly said that most digital assets are securities and that the current rules are clear and crypto firms refuse to abide by them.
The relationship between Coinbase and the SEC has seriously deteriorated over the past few years. In 2021, the institution published its intent to file a Wells Notice on Coinbase's upcoming lending product, which the exchange denied.
But Chief Executive Officer Brian Armstrong accused the agency of "some really sketchy behavior". Coinbase received another Wells Notice for a number of its products earlier this year, promising to "try all means" if lawsuits are filed.
Responding to the SEC's filing on Twitter Monday, Coinbase chief legal officer Paul Grewal said that the agency may have made the first formal announcement in court of its views on whether and how it should create rules for the crypto industry.
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
The SEC argued that it takes time to consider regulatory changes in the filing.
The agency said this is necessarily a complex endeavor. He added that there is no deadline for him to complete his studies.
*Not investment advice.