In the ongoing Coinbase versus the United States Securities and Exchange Commission (SEC) feud, a top-level Coinbase executive has provided some new details. Reportedly, the court has responded to Coinbase’s complaint against the SEC.
On Thursday, Paul Grewal, Coinbase’s chief legal officer (CLO), stated that the US Court of Appeals for the Third Circuit responded to the complaint against the SEC regarding the need for clear rules for trading digital assets. This marks a development in the legal battle for regulatory clarity.
As stated by Grewal, the court’s response to their complaint against the SEC was a text-only order. The court has ordered the SEC to respond to Coinbase’s writ of mandamus within ten days. A writ of mandamus is an order from a court to an inferior government official ordering the government official to properly fulfill their official duties or correct an abuse of discretion.
Grewal stated that the court had granted Coinbase the right to file a reply to the SEC’s response within seven days of the filing. He also expressed appreciation for the court’s thorough examination of the case.
The recent notice from the court to SEC is in response to the lawsuit filed by Coinbase a few days back. The lawsuit was requesting that the court compel the SEC to publicly disclose its stance on a petition submitted several months prior.
In the petition, the exchange posed 50 specific questions about the regulatory treatment of certain digital assets. The questions were wide-ranging, covering topics such as how tokens are classified as securities and seeking clarification on several other significant matters.
The matters between the SEC and Coinbase started after the regulator sent a Wells Notice to the firm accusing it of violating federal securities laws. A Wells notice letter typically warns a company that the SEC may follow with an enforcement action.
In response to the notice, the Coinbase executives showed varied responses often criticizing the regulator and their anti-crypto actions. They often cited a willingness to be engaged in legal procedures with the regulator if required.
Notably, SEC has been carrying an enforcement-oriented approach targeting various crypto firms. It has issued warnings and notices to several crypto exchanges accusing them of violating laws and some of these names include Paxos, Kraken, etc.
It is being speculated the regulatory feud has affected Coinbase significantly. While the U.S. investment bank Citigroup downgraded the shares of the crypto exchange from “buy” to “neutral” and has also lowered its price target, the app usage has also taken a hit as reported by Todayq News.
Simultaneously, adding to the trouble comes another lawsuit against the company alleging that the top executive bench of the exchange sold stock using inside information and dodged massive losses. Reportedly, the top executive bench tried avoiding losses of over $1 billion with the help of inside information to sell stock within days of the platform’s public listing in 2021.