The exchange said on Monday that Coinbase had filed a petition to force the U.S. Securities and Exchange Commission to respond to a months-old petition asking whether the securities regulator would allow regulation of the industry using existing SEC frameworks, escalating its tensions with the regulator that has stepped up enforcement action and warnings against it. Crypto companies, including the US giant.
In a July 2022 petition, Coinbase asked whether the SEC would propose and approve rules governing the regulation of securities offered and traded via digital native methods. The Securities and Exchange Commission has not responded to the petition.
“The rulemaking process is in place so that agencies can develop regulations while benefiting from public input, and test their standing through judicial review. To date, more than 1,700 entities and individuals have submitted comments on Coinbase’s petition echoing the request for clarification,” wrote Coinbase’s chief legal officer Paul Grewal. In a blog post.
Grewal confirmed that from the SEC’s public statements and enforcement activity in the crypto industry, it appears the regulator has made a decision to deny Coinbase’s petition, “but they haven’t told the public yet.”
The petition, which was filed with the US Court of Appeals for the Third Circuit on Monday, is the latest opposition the SEC has received in recent months as the regulator pushes actions against crypto firms Bittrex, Gemini and Genesis, as well as entrepreneurs including Justin Sun and Will Kwon. .
Last month, the Securities and Exchange Commission (SEC) threatened to sue Coinbase over certain products of the exchange. Coinbase is the gold standard among cryptocurrency exchanges for compliance, but the US company has struggled over the years because it has been unable to develop and roll out new products due to legal uncertainty even as its competitors expand into international markets.
Coinbase co-founder and CEO Brian Armstrong said the exchange may consider moving its headquarters out of the United States unless the country changes its approach to regulation. “Everything is on the table, including, you know, relocation or whatever is necessary,” he said last week.
“Coinbase does not take litigation seriously, especially when it comes to one of our regulators. The time has come for regulatory clarity in our industry. However, Coinbase and other crypto companies face potential regulatory enforcement action from the SEC, although we are not told how. The SEC believes the law applies to our business,” Grewal wrote.