After a long period of silence and vague answers from the US Securities and Exchange Commission (SEC), Coinbase, a cryptocurrency company, filed a formal court petition on Saturday. Paul Grewal, Coinbase’s Chief Legal Officer, tweeted, “We couldn’t wait until our deadline next week to address the SEC’s response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court. The SEC’s evasive response goes further, as we set out today.”
Coinbase is asking a federal judge to issue a “mandamus,” which is an order from a higher court to a government agency to carry out a certain action that it is legally obliged to do. In other words, Coinbase is asking the judge to compel the SEC to establish clearer rules and standards for the digital assets industry, which was the purpose of the company’s petition last year.
The SEC took legal action against Coinbase earlier this month, claiming that it offered investors services without registering as an exchange, clearing house, or broker, and sold unregistered securities on its platform. The judge noted the SEC’s action and asked them to respond to the petition. Coinbase said it was still thinking about what to do.
Grewal said, “The Commission’s refusal to say how much additional time it needs to act on Coinbase’s petition confirms that further delay is futile. At a minimum, the Court should order the Commission to report on Its action.” Coinbase, in turn, accused the SEC of “pushing the limits of cognitive dissonance” by asking for compliance with nonexistent rules.
The SEC, under the leadership of Chairman Gary Gensler, maintains that clear rules are already in place. However, the agency has recently asked the courts to reject Coinbase’s request for clearer rules.
Coinbase has been unwavering in its mission for a definitive regulatory scheme, although they have previously mentioned that the SEC has no intention of instituting one. The crypto exchange reiterated this sentiment in its latest filings, saying that the agency has been “inconsistent” in creating a “Catch-22” for the industry.
Gensler has said that the SEC “stands ready to help,” but their actions tell a different story. Coinbase has been adamant in its quest for a resolution.
