The plot thickens as Coinbase exchange strives for a clear regulatory scheme in the United States. Following a “noncommittal” and unsatisfactory response from the Securities and Exchange Commission (SEC), the US-based crypto company has submitted another official petition to a federal court on Saturday.
This move would come as the latest action in the “legal battle” between the SEC and Coinbase after the cryptocurrency exchange was sued by the U.S. financial watchdog earlier this month.
Coinbase Files Mandamus Petition Against ‘Evasive’ SEC
On June 6, 2023, the SEC brought charges against Coinbase, alleging that the crypto company is an unregistered securities exchange and broker. This lawsuit claims that Coinbase, through its staking-as-a-service program, violated the existing securities law. However, a judge ordered the federal agency to respond to the exchange’s initial petition for a clear regulatory scheme.
Last year, the cryptocurrency exchange submitted a rulemaking petition to the SEC, asking the agency to clarify the standards for determining whether a digital asset is a security and a plausible registration path for the crypto industry.
On Tuesday, June 13, the financial regulator finally responded with a letter, stating that “it has not decided what action to take on the petition in whole or in part”. That said, it is worth noting that the SEC also claimed that it anticipates an internal recommendation from agency staff in 120 days.
In a June-16 request letter to the Third Circuit, Coinbase reiterated its pursuit for a definitive regulatory framework, while alleging that the SEC seems to be deliberately avoiding that. The first argument in its official letter requests that the court grants mandamus, a judicial writ issued as a command to a government agency to perform a specific obligatory duty.
In this case, a federal judge will order the SEC to set and clarify the rules and regulations governing the crypto industry.
‘The Rules And Regulations Are Already Clear’
Coinbase further told the court that the commission’s refusal to admit how much additional time it needs to act on the rulemaking petition confirms that further delay is futile. The U.S.-based crypto exchange believes the agency will not act unless compelled by a writ.
Coinbase asserts that the SEC’s apathy toward the petition is intentional. Some might consider this credible especially after Gary Gensler, the commission’s chair, recently stated that there will be no rulemaking because “the rules and regulations are already clear” and “have been for years.”
At the very least, if there is no decision on the mandamus request, Coinbase wants the court to order the SEC to report on its action in no more than 60 days. And, if there is still no action from the agency after the stipulated period, the court should rule promptly on the mandamus petition.
Despite the regulatory travails of the crypto industry, it continues to show strength and resilience, with a market capitalization of $1.037 trillion.
Total Crypto Market Cap at $1.037 trillion | Source: CryptoTotalMarketCap chart from TradingView
Featured image from Unsplash, chart from TradingView