The US Securities and Exchange Commission (SEC) has urged a judge not to entertain Coinbase’s request for clearer crypto regulation guidelines, stating that the commission is not mandated to fulfill the outlined Coinbase’s requirements. In a recent court filing, the SEC argued that the crypto exchange is asking for a comprehensive set of reforms and rule-making within an unreasonable timeframe.
Coinbase had filed a lawsuit with a federal appellate court in Philadelphia last month, claiming that the SEC refuses to address its rulemaking petition while aiming to initiate enforcement actions against the firm for listing unregistered securities. In July last year, Coinbase filed a petition with the SEC requesting regulations explaining how securities laws apply to cryptocurrency and to engage in a formal notice-and-comment process to allow public input.
The SEC countered in the filing that regulatory changes necessitate time and deliberation. It described the process as a “necessarily complicated endeavor” and noted that there is no deadline for its completion.
In response to the SEC filing, Coinbase Chief Legal Officer Paul Grewal said this might be the first instance wherein the SEC formally explained its views on whether and how it should develop rules for the crypto industry in court. Grewal highlighted that the SEC conveyed its lack of urgency in rule-making and would continue relying on enforcement actions rather than defining a regulatory framework.
He also added that SEC Chair Gensler’s public statements do not constitute formal guidance or policy statements, and the public cannot rely on them as such.
The relationship between the SEC and Coinbase has soured in recent times. In March, the commission sent a “Wells notice” to Coinbase, threatening legal actions concerning some of its listed digital assets, its staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet. Following this, Coinbase CEO Brian Armstrong accused the agency of engaging in “some really sketchy behavior.”
Armstrong has also hinted that the exchange could potentially leave the US if regulators fail to clarify their stance on the digital asset space. “Anything is on the table, including relocating or whatever is necessary,” Armstrong said during the Innovate Finance Global Summit last month. This tussle between the SEC and Coinbase further highlights the need for a clearer regulatory framework in the crypto industry to foster innovation and compliance.
Source: Cryptonews
