In a recent development, the Securities and Exchange Commission (SEC) has responded to Coinbase after a court requested clarity from the commission and provided them with a seven-day deadline. The SEC’s response is in relation to the case Coinbase brought against the commission, as opposed to the lawsuit the SEC has filed against the crypto exchange.
According to the SEC, Coinbase’s “mandamus petition should be denied.” In essence, the petition aims at compelling a government agency to fulfill its duties. The SEC’s lawyers further stated that the commission has yet to decide on the action to be taken regarding the petition, which is reasonable given the extensive nature of the rulemaking petition and its more recent supplementation by Coinbase.
On a more positive note, the SEC has informed that its staff anticipates being able to make a recommendation to the commission regarding Coinbase’s rulemaking petition within the next 120 days. However, they were quick to assert that they find Coinbase’s claims “baseless.”
The response from the SEC is not without its detractors. Coinbase’s chief legal officer, Paul Grewal, remarked that the filing mixes the evidence of a decision with the argument that the statements are themselves a decision. The confusion stems from Coinbase’s argument that the enforcement of existing legal requirements and certain statements by the SEC’s Chair demonstrate a silent decision to deny Coinbase’s rulemaking petition.
The current state of affairs began when the Third Circuit Court of Appeals requested that the regulatory agency respond to a writ of mandamus filed by Coinbase. This follows the SEC’s lawsuit against Coinbase, alleging that the crypto company operated an unregistered exchange that listed numerous unregistered securities. The court sought to know if the SEC planned to deny the rulemaking petition or if they merely required more time to examine the petition.
Coinbase initially filed the mandamus petition in late May, effectively asking the court to oversee the SEC’s regulatory approach to cryptocurrency. This was preceded by the SEC being ordered to respond to Coinbase’s request for regulatory clarity.
Both sides of the argument present strong viewpoints, especially when it comes to the role of regulatory agencies in the still-evolving world of cryptocurrency. As time goes on, the space will need to strike a balance between innovation and regulatory compliance. For now, the cryptocurrency community and regulators remain intertwined in an intricate dance, with the future of the industry hanging in the balance.
Source: Blockworks
