The Securities and Exchange Commission (SEC) has delivered an unwelcome response to Coinbase‘s request for the agency to establish regulatory clarity for the cryptocurrency industry. In an April mandamus petition, Coinbase called for federal courts to direct the SEC to provide clear guidelines for crypto exchanges and companies.
In its rather disheartening response, the SEC claimed that Coinbase has no right to mandamus, which compels a government agency to fulfill specific duties. It acknowledged that Coinbase wanted the commission to act on its recently filed rulemaking petition, but clarified that no statute or regulation requires the commission to do so within a specific timeline.
The SEC pointed out that only a few months have passed since Coinbase’s petition was filed and even less time since it supplemented the record. It emphasized that pondering over the significant changes sought by Coinbase, which could impact both crypto assets and securities markets more broadly, takes time. Making a decision on whether or not to initiate rulemaking proceedings about such subjects in the first instance is particularly challenging, especially in light of the commission’s ongoing regulatory and enforcement activities in this area.
Critics of the SEC’s inaction might argue that the agency has, indeed, been active under Gary Gensler’s leadership, taking action against not only crypto projects but also exchanges. In response to a Wells Notice received in March 2023, which indicated possible regulatory enforcement action from the SEC, Coinbase filed its lawsuit alleging issues with the exchange’s Wallet and Prime services.
In conclusion, the SEC maintained that Coinbase’s preference for immediate action does not entitle it to extraordinary relief, ordering the commission to rule on a petition that has been pending for less than a year. This development showcases the ongoing struggle between the demands of the crypto industry for regulatory clarity and the cautious stance taken by financial authorities such as the SEC. Time will tell how these opposing forces continue to interact and impact the development of the cryptocurrency industry as a whole.
Source: Blockworks
