The U.S. Securities and Exchange Commission (SEC) wants more time to respond to a petition filed by crypto exchange Coinbase asking the regulator to provide clarity on rules for the digital asset industry.
In a June 13 letter submitted to the U.S. Court of Appeals for the Third Circuit, the SEC reiterated that it sees no merit in Coinbase’s request for the court to compel the agency to respond to its rulemaking petition.
“The Commission has not decided what action to take on that petition in whole or in part — which is entirely reasonable given the breadth of the rulemaking petition and the fact that it was filed just months ago and supplemented by Coinbase more recently,” stated the letter.
Still, lawyers for the agency disclosed that SEC staff anticipate being able to make a recommendation on the petition within the next 120 days. The SEC will provide the court with a status report after this time has elapsed, naming Oct. 11, 2023 as the final deadline, the lawyers said.
4) they ignore the clear statements of the Chair that confirm they have no intent to issue new rules, and instead conflate the evidence of a decision those statements provide with an argument that the statements are themselves a decision. 3/5
— paulgrewal.eth (@iampaulgrewal) June 13, 2023
The SEC’s response is the latest development in a series of back-and-forth legal discourse between the regulator and Coinbase. The crypto exchange sought to compel the SEC’s response to a rulemaking petition it filed last year, arguing that the regulator has opted to define rules for the crypto industry through enforcement actions.
However, although many firms in the industry are at odds with the SEC on the subject, some firms claim that a clear path to being compliant already exists. Two FINRA-approved digital asset firms said that the SEC’s “Three-Step-Process” outlines a clear framework for crypto companies, but companies that fall outside the existing requirements would need a big rebuild to fit the regime.
“It’s a big process, and it would take them a significant amount of time. So instead what we see is that they move to fight in the court of public opinion,” said Aaron Kaplan, founder and CEO of Prometheum.