On April 24, 2023, Coinbase announced that it had filed a lawsuit in federal court asking the United States Securities and Exchange Commission (SEC) to respond to their petition. The petition, filed in July 2022, asked the commission to propose and adopt rules governing the regulation of digital assets.
Coinbase Calls on SEC to Respond to Petition for Digital Asset Regulation
The Coinbase cryptocurrency exchange has filed a lawsuit lobby the United States Securities and Exchange Commission (SEC) over its July 2022 Petition seek regulatory advice. In an announcement on Monday, Coinbase Chief Legal Officer Paul Grewal pointed out that more than 1,700 entities and individuals submitted comments in support of the request for clarity.
The company believes that regulatory clarity in the crypto space is long overdue. Although the securities regulator has launched a series of potential regulatory actions, crypto firms have not been told how the SEC believes the law applies to their business.
“Based on public statements by the SEC and enforcement activity in the crypto industry, it appears that the SEC has already decided to deny our petition. But they haven’t told the public yet. So the suit Coinbase filed today simply asks the court to ask the SEC to share its decision,” Grewal wrote.
The firm’s legal director added:
It is also unusual for an agency to bring enforcement actions based on a view of the law that it has not yet officially communicated to the public. Again, Coinbase is not asking the Court to tell the agency how to respond. We are simply asking that the Court order the SEC to respond, which it is legally required to do.
Coinbase’s announcement follows the CEO’s recent tweet that said a few members of the company flew to the SEC offices in Washington. “I met with the SEC today. We will continue to push for a clear rulebook in the United States for crypto regulations,” Brian Armstrong writing. “The United States cannot afford to fall behind on this important technology to update the financial system.”
The company noted in its Monday announcement that the lawsuit filed is part of an “ongoing, multi-year call to Washington leaders for clear rules of conduct.” Coinbase acknowledges that regulations are needed and highlights how the company has implored authorities to establish such guidelines for clarity. Coinbase is seeking to “establish ground rules,” and while the federal lawsuit seeks to resolve the impasse over the petition, the company said it will be pursued to completion.
What are your thoughts on the legal battle between Coinbase and the SEC over the need for clear regulatory guidelines in the crypto industry? Share your thoughts on this topic in the comments section below.
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