San Francisco: Leading Blockchain and cryptocurrency platform Coinbase has sued the US Securities and Exchange Commission (SEC) to compel the commission to respond yes or no to its July 2022 rule-making petition.
The petition had asked the SEC to use its formal rule-making process to provide guidance for the crypto industry.
To date, more than 1,700 entities and individuals have submitted comments to Coinbase’s petition echoing the request for clarity.
Coinbase chief legal officer Paul Grewal said that the Administrative Procedure Act (APA) requires the SEC to respond to Coinbase’s rulemaking petition “within a reasonable time”.
“If the SEC says no to our rule-making petition, which it has the right to do, then Coinbase would be allowed to challenge that decision in court and explain in that formal setting why rulemaking is required,” Grewal said in a blog post.
He said that from the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny Coinbase’s petition.
“But they haven’t told the public yet. So the action Coinbase filed today simply asks the court to ask the SEC to share its decision. This step may feel unusual, and it is, because this step is usually not needed. But it is also unusual for an agency to bring enforcement actions based on a view of the law that it has not yet shared formally with the public,” Grewal argued.
Coinbase said it is simply requesting that the Court order the SEC to respond at all, which they are legally obligated to do.
In March, the crypto exchange was put on notice by the US SEC for allegedly breaking securities laws.
The SEC gave Coinbase a “Wells notice” regarding an undefined portion of its listed digital assets, staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet after a cursory investigation.
Coinbase had said it was prepared for “this disappointing development”.
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