After a prolonged period of silence and vague responses from the United States Securities and Exchange Commission (SEC), cryptocurrency firm Coinbase filed an official request in federal court last Saturday. In a tweet, Paul Grewal, Chief Legal Officer for Coinbase, highlighted the unusual nature of the government’s defiance of a federal court’s direct question. This standoff further emphasizes the SEC’s evasive response to the June 6 order from the Third Circuit.
According to the Coinbase filing, the company seeks “mandamus” – a court order issued by a higher court to a government agency, compelling them to perform a specific action or duty they are legally required to do. In simpler terms, Coinbase is requesting a federal judge to force the SEC to set clearer rules and standards for the digital assets industry – an objective unmet by a petition submitted by the crypto exchange last year.
The SEC has since sued Coinbase for allegedly failing to register as an exchange, clearing house, and broker while providing related services to investors. The lawsuit further accuses Coinbase of selling unregistered securities on its platform. Although the SEC never responded to the exchange’s petition, a judge noticed the federal regulator’s action against Coinbase and ordered them to respond.
Coinbase argues that the Commission’s refusal to announce a timeframe for addressing the petition renders further delay useless. Grewal called for the court, at the very least, to order the Commission to report on its actions. In a scathing remark, Coinbase accuses the SEC of “pushing the limits of cognitive dissonance” by demanding compliance with non-existent rules.
SEC Chairman Gary Gensler insists that clear rules already exist, despite the agency’s recent request for courts to deny Coinbase’s plea for clearer rules. This discrepancy highlights the ongoing uncertainty surrounding regulations for the crypto industry.
Coinbase remains insistent on a definitive regulatory framework, even if they believe the SEC has no intention of establishing one. The cryptocurrency exchange accuses the agency of being “inconsistent” and creating a “Catch-22” for the industry.
While Gensler has claimed that the SEC “stands ready to help,” their actions give an impression contrary to their words – showcasing the complexities and challenges involved in regulating the ever-evolving cryptocurrency industry. As the tension between Coinbase and the SEC grows, the implications of this dispute may significantly impact the broader cryptocurrency market and its stakeholders.
Source: Decrypt
