In the ongoing case between the United States Securities and Exchange Commission (SEC) and Coinbase, the firm has again criticised the regulator. The exchange has targeted the SEC for failing to answer questions asked in the U.S. Court of Appeals as part of its ongoing legal battle with the regulator.
In a recent letter addressed to the court, lawyers for Coinbase grilled the SEC for continuing to ignore its rulemaking petition, which calls on the SEC to establish a regulatory framework for digital assets. The letter was in response to the SEC’s June 13 submission requesting an additional 120 days to reply to Coinbase’s rulemaking petition. The letter stated:
When ordered by this Court to address the stark inconsistency between its litigating position and its actions and statements elsewhere, the SEC still offers no straight answers and instead repeats its talking points.
Further, Coinbase slammed the SEC’s reluctance to inform the court of updates on its decision, saying it “bristles even at being ordered to update the Court on its progress.” It added that the impact of the SEC’s silence, the lengthy delays and its enforcement actions continue to weigh on the crypto industry and SEC chair Gary Gensler “continues to charge well down the path to irreparably damaging a U.S. public company and an entire industry.”
Prior to this, on June 17, Paul Grewal, Coinbase’s chief legal officer (CLO), said in a series of tweets that it’s “unusual for the government to defy a direct question from a federal court.” He had added that he’s hoping for the court to grant a writ of mandamus, which is a court order to a government official ordering them to fulfill their official duties under the law, given that the SEC knocked back Coinbase’s petition.
Reportedly, Coinbase is also requesting that the court instead set a deadline of 60 days or less starting from June 13 i.e. the date of the SEC’s request. In April, the firm filed a rulemaking petition against the SEC seeking an immediate determination to take a series of discretionary actions to replace existing applicable securities laws and regulations with a comprehensive new regulatory regime for the trading of crypto assets that are securities.
Then the US Court of Appeals for the Third Circuit sent a notice to the SEC regarding the need for clear rules for trading digital assets. However, even after all this, the SEC remained adamant and disregarded the need for regulations. It also denied Coinbase’s request and said it had no right to request regulatory clarity and that securities rules already exist.
In a separate case, the SEC sued Coinbase on June 6, alleging the trading platform broke various securities rules, most notably for purportedly offering cryptocurrencies that the regulator considers to be unregistered securities. However, as Coinbase fights its legal battles with the SEC, the exchange would continue to outline the requirement of crypto regulation, a topic supported by the industry in large.