Coinbase, one of the world’s leading cryptocurrency exchanges, has taken legal action by suing the US Securities and Exchange Commission (SEC) to obtain clarification on regulatory rules surrounding the growth of crypto businesses in the US. This move is aimed at compelling the SEC to provide detailed information on crypto regulations to enable crypto companies to plan and develop their operations.
Coinbase’s lawsuit comes months after the exchange requested clarity from the SEC on crypto regulations, following the regulator’s investigation into the exchange’s business activities. In July 2022, Coinbase filed a petition asking the SEC if it would provide guidance to crypto players through its official rulemaking process.
In a recent blog post, Coinbase stated that it had filed a narrow action in federal court to compel the SEC to respond to its July 2022 petition within a reasonable time, as required by the Administrative Procedure Act (APA). Over the last nine months, Coinbase’s petition has received over 1,700 comments from various entities. If the SEC responds negatively to Coinbase’s petition, the crypto exchange may challenge the decision in court and make a case for clear crypto guidelines in the US.
Coinbase’s legal action is aimed at ensuring that the SEC responds to its petition and makes a decision, even if the decision is negative. The blog post suggests that the SEC may have already made a decision to deny Coinbase’s petition based on its recent public statements and enforcement activities in the crypto industry. Coinbase’s lawsuit is therefore aimed at compelling the SEC to share its decision with the public.
Coinbase’s move to get the SEC to make a decision on its petition is being seen as a reaction to the SEC’s recent threat to sue Coinbase Global over some of the exchange’s spot market as well as its Earn, Prime, and Wallet products. By seeking clarity on regulations, Coinbase hopes to enable crypto businesses to operate with greater certainty and reduce regulatory risk.
