Coinbase Continues to Challenge SEC’s Refusal for Rulemaking in Ongoing Legal Battle

Coinbase, one of the leading cryptocurrency exchanges, is persistently urging the U.S. Securities and Exchange Commission (SEC) to engage in rulemaking through the legal system, according to a statement by Coinbase CLO Paul Grewal on May 23.

The ongoing dispute between Coinbase and the SEC stems from a Wells notice received by Coinbase on March 22, indicating the potential for legal action by the regulatory agency due to alleged regulatory violations.

Since April 25, Coinbase has been submitting legal filings in an effort to compel the SEC to respond to a previous petition and provide clear guidelines. However, on May 15, the SEC responded by asserting that it has no obligation to create new regulations. Coinbase’s most recent court filing, dated May 22, challenges the SEC’s refusal to engage in rulemaking and points out inconsistencies in the SEC’s statements.

In its filing, Coinbase argues that while SEC members have publicly stated their unwillingness to participate in rulemaking, they have also made remarks suggesting that they are actively considering Coinbase’s petition and other regulatory approaches. Coinbase further contends that the SEC’s broad enforcement actions against the cryptocurrency industry indicate a lack of consideration for the petition.

Concluding its latest filing, Coinbase requests the court to issue a writ of mandamus, which would compel the SEC to respond to its original petition within seven days. Alternatively, Coinbase proposes that the court order the SEC to justify the delay, establish a timeline for its response, and provide regular updates on the matter.

The ongoing legal battle between Coinbase and the SEC highlights the regulatory uncertainties surrounding the cryptocurrency industry. Coinbase’s insistence on seeking clear rules from the SEC indicates the company’s commitment to operating within a well-defined regulatory framework. The outcome of this case could have significant implications for both Coinbase and the broader cryptocurrency market, as it may shape the regulatory landscape for digital assets in the United States.

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