Late last month, Coinbase — which had already been hit with a Wells Notice, an informal warning from the SEC usually followed by a lawsuit — asked the courts to force the agency to spell out what steps they should take to stay in compliance.
The SEC, on the other hand, remains silent.
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According to Brian Armstrong – the CEO of Coinbase – his company intends to fight the current trend of regulation through enforcement and seeks to promote cooperation and amicable discussions regarding regulation.
“I spent the day in DC meeting with members of Congress. We need regulatory clarity in the US for centralized crypto players for many reasons – consumer protection, national security, economic growth, etc. The SEC has done untold harm to America with its rule-by-enforcement policy. We will fight to fix it. »
The executive further said the company is prepared to defend itself in court but would prefer not to and reiterated that he and his exchange are open to good faith discussions with regulators.
Framework already established, says Gensler
Despite Coinbase’s willingness to trade, SEC chief Gary Gensler told the court that the existing regulations are already clear and crypto exchanges simply refuse to consider them, according at Bloomberg.
In return, Coinbase asked for a clear rule-making guideline, submitted through a notice-and-comment process that would allow the newly clarified rules to be reviewed in public.
Unfortunately for the exchange, the SEC decided to block the claim in court, indicating this regulation can take years to materialize.
“Coinbase’s preference for faster or different regulatory action from the commission does not entitle it to extraordinary relief from this court. The request must be dismissed. »
Paul Grewal, Chief Legal Officer of Coinbase, took to Twitter to reiterate his firm’s position that the SEC is not providing clarity to the companies it regulates.
Today, the SEC responded to Coinbase’s motion for a writ of mandamus – asking the court to require the SEC to simply answer yes or no to the question of whether it will undertake rulemaking for our industry. The SEC’s response? A resounding perhaps. 1/7
— paulgrewal.eth (@iampaulgrewal) May 16, 2023
The securities regulator said Gensler’s public comments should not be taken as statements of policy – although it acknowledges they may continue to use enforcement measures instead of a framework regulation until they have smoothed out the contours.
In the meantime, Coinbase has remained firm in its position, saying it does not list any securities. According to a company spokesperson, the exchange already considers SEC securities guidelines when choosing which tokens to list, leading them to reject around 90% of applications.
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