Crypto exchange Coinbase has taken legal action that would force the U.S. Securities and Exchange Commission (SEC) to respond to a rulemaking petition filed last year.
In a court action filed in the U.S. Circuit Court on April 24, Coinbase asked the federal judge to force a response from the SEC on a 2022 petition filed by the exchange which would provide regulatory clarity on the digital asset sector.
The petition posed 50 questions to the SEC about the treatment of cryptocurrencies and the grounds for their classification as tokens or securities.
“Coinbase does not ask the Court to instruct the agency how to respond. It simply requests that the Court order the SEC to respond at all,” said Coinbase in the court action filed on Monday.
The filing also cites how the regulator cleared the way for Coinbase to become a publicly listed company in 2021, without any indication that the exchange needed to register with the Commission.
A number of lawsuits brought by the agency with regard to alleged “unregistered securities offerings” of late would suggest that regulators hold a certain view of what constitutes a security. However, most representatives from the agency, including SEC Chair Gary Gensler himself, have avoided directly sharing their views on the subject.
“It seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet,” wrote Coinbase’s Chief Legal Officer Paul Grewal in a blog post.
Grewal noted that the Administrative Procedures Act (APA) requires the SEC to respond to Coinbase’s petition within a reasonable time.
“This step may feel unusual, and it is, because this step is usually not needed. But it is also unusual for an agency to bring enforcement actions based on a view of the law that it has not yet shared formally with the public,” said Grewal.