Crypto exchange Coinbase has submitted another court action seeking to compel the U.S. Securities and Exchange Commission (SEC) to provide regulatory clarity for the digital asset industry.
The latest court action follows a writ of mandamus petition that Coinbase filed on April 25, seeking court intervention to order a response from the SEC with regards to its request for the agency to comment on specific rulemaking for crypto assets.
On May 15, the SEC filed its own response, saying it was under no obligation to comply with Coinbase’s request and that the exchange does not qualify for the mandamus relief requested, dubbing it an “extraordinary remedy.”
In a response filed on May 22, Coinbase argued that, on the contrary, the mandamus was actually the tailor-made remedy for the extraordinary facts presented.
Late last night Coinbase replied in the Third Circuit to the SEC’s arguments against our petition for a writ of mandamus. Mandamus is the tailor-made remedy for the extraordinary facts presented here. We continue to appreciate the Court's consideration. https://t.co/OD02kX3524
— paulgrewal.eth (@iampaulgrewal) May 23, 2023
Coinbase argued that the SEC’s choice to regulate the industry through enforcement actions, instead of enacting specific rules for the industry to comply with, was the root of the problem.
Over the last few months, the SEC has filed several lawsuits against crypto firms for alleged unregistered securities offerings on their platforms. A Wells Notice served to Coinbase in March suggests that the regulator intends to bring a similar enforcement action against the crypto exchange. Despite SEC Chair Gary Gensler’s assertion that the rules for crypto assets have already been published, Coinbase argued that the path to registration with the regulator still doesn’t exist.
“By effectively—but not yet formally—denying Coinbase’s rulemaking petition, the SEC is preventing Coinbase from exercising its right under the Administrative Procedure Act (“APA”) to challenge the SEC’s decision to forgo rulemaking,” stated Coinbase in the filing.
The filing concluded by asking the court to instruct the SEC to respond to Coinbase’s petition within seven days or set a deadline explaining the reason for the delay.