Kostyantyn Kryvopust: crypto exchange Coinbase sues the SEC, demands the court to compel a response to the petition on rulemaking

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Coinbase has filed a lawsuit to compel the Securities and Exchange Commission to respond to its July 2022 petition seeking clearer guidance on cryptocurrency regulation.

On Monday, the company filed a lawsuit to a federal appeals court in Philadelphia, arguing that the SEC was not reasonable or prompt in responding.

The lawsuit alleged that “the SEC is refusing to consider Coinbase’s rulemaking petition,” even as the agency expresses its intent to initiate enforcement proceedings against Coinbase for allegedly offering unregistered securities.

Last July, Coinbase filed a petition with the Securities and Exchange Commission (SEC) asking it to write regulations explaining how securities laws apply to cryptocurrency and to participate in a formal notice and comment process to allow the public participate.

The largest crypto exchange also sent comments to the agency last month, seeking more clarity on the SEC’s views on staking services, where users lock up crypto assets for a set period of time to help keep the blockchain running and receive rewards. In return.

Coinbase Chief Legal Officer Paul Grewal wrote in accompanying blog post that the exchange is not asking the court to tell the SEC how to respond.

“We are simply asking that the Court compel the SEC to answer at all, which they are required to do by law.”

Coinbase is pushing the idea of ​​leaving the US amid regulatory uncertainty

The Securities and Exchange Commission (SEC) has launched an aggressive crackdown on the crypto industry following the catastrophic collapse of cryptocurrency exchange FTX last year.

This year, the agency took action against crypto exchanges Bittrex and Gemini, crypto lender Genesis, and a number of individuals accused of manipulating crypto assets, including crypto entrepreneur Justin Sun and disgraced Terraform Labs founder Do Kwon.

The SEC also recently issued a “Wells notice” to Coinbase, threatening the crypto exchange with legal action over certain listed digital assets, its staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet.

Addressing growing regulatory uncertainty in the US, Coinbase CEO Brian Armstrong said the exchange could leave the US if regulators don’t clarify their approach to the digital asset space.

“Anything is on the table, including relocation or whatever else is necessary,” he said at the Innovate Finance Global Summit last week.

“I think the US has the potential to be an important cryptocurrency market, but right now we’re not seeing the regulatory clarity we need.”

As reported, Coinbase is considering establishing a digital asset exchange outside the United States amid increased regulatory pressure and a poor banking climate for crypto companies.

In March, Armstrong warned that the SEC’s hostile regulatory approach could push the crypto industry out of the United States.

The crypto boss said that almost all major financial centers, including Singapore, Hong Kong, London and recently the European Union, have implemented comprehensive cryptocurrency legislation, adding that the US should also follow suit if it does not want to be left behind. .

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