U.S. Court Orders SEC to Respond to Coinbase “Rulemaking Petition” Within One Week

Court order to SEC

On the 6th, the U.S. Court of Appeals ordered the U.S. Securities and Exchange Commission (SEC) to respond to a virtual currency rulemaking petition filed by the major U.S. crypto asset (virtual currency) exchange Coinbase within a week. ordered to submit to

Earlier tonight the Third Circuit issued a short order in Coinbase’s mandamus action today.The court noted the SEC’s suit against us this morning and asked the SEC whether that means the SEC has decided to deny our pending petition for rulemaking.The SEC has 7 days to respond. pic.twitter.com/8QXXoHJ07Z

— paulgrewal.eth (@iampaulgrewal) June 7, 2023

The court is seeking three answers from the SEC:

1. Has the SEC Now Decided to Deny Coinbase’s Petition for Rulemaking?
2. If not, how long will it take to decide whether to accept or deny the petition?
3. If the SEC has not yet decided to grant or deny, why does the Court have jurisdiction over its statutory powers to order periodic reports or set deadlines to adjudicate Coinbase’s petitions, as proposed by Coinbase? don’t you need to hold

The court cited two reasons for issuing this reply order.

1. SEC Chairman Gensler tells Congress and the public that current regulation of digital assets is sufficient
2. Takes recent enforcement action against Coinbase and others without making a decision on Coinbase’s petition

The SEC filed a lawsuit against Coinbase on Thursday for violating federal securities laws, following Binance on Wednesday. The SEC’s move to tighten its grip on the industry while neglecting to clarify regulations has also raised criticism.

Coinbase’s Chief Legal Officer, Paul Grewal, said that the court took seriously the fact that the SEC filed a lawsuit while the SEC was reserving a decision on the company’s petition, and ordered the SEC to respond on the same day. Thank you for your consideration.”

connection:Coinbase sues SEC Chairman Gensler “We don’t need cryptocurrencies anymore”

Coinbase VS SEC

Coinbase’s regulatory petition, which the Court of Appeals has ordered the SEC to respond to, was filed last year.

In July 2022, Coinbase filed a petition with the SEC to “develop a workable regulatory framework,” arguing that current securities laws are not suitable for managing cryptocurrencies. After nine months and no response from the SEC, Coinbase filed a lawsuit with the SEC in April 2023 to seek an answer to the issue.

connection:Coinbase Sues U.S. Securities and Exchange Commission for “Clarification of Regulations”

About a month before Coinbase filed a lawsuit against the SEC, the SEC issued a “Wells Notice” to Coinbase for alleged securities law violations, suggesting possible legal action. In response to this notice, Coinbase responded by suing the SEC.

connection:SEC Investigates Coinbase for Securities Law Violations, Sends Wells Notice

On May 5, 2023, the court ordered the SEC to respond to a petition for regulatory clarification filed by Coinbase. However, the SEC countered on the 15th of the same month, saying that Coinbase does not have the right to order government agencies to perform specific tasks. Coinbase argued the legality of the lawsuit on the 22nd, and the issue had reached a stalemate.

connection:US Court of Appeals Orders SEC to Respond to Coinbase Petition

Senator’s reaction

In the United States, a clear cryptocurrency regulatory framework has yet to be established. The SEC’s spate of lawsuits against major exchanges has been strongly criticized both inside and outside the industry for its “regulation by enforcement” approach.

The @SECGov is weaponizing their role to kill an industry. Allowing a company to list publicly and then stonewalling their attempts to register is indefensible. @GaryGenslerexpect to hear from Congress. https://t.co/GdprSW1Yns

—Senator Bill Hagerty (@SenatorHagerty) June 6, 2023

Senator Bill Haggerty tweeted: In another tweet, the Biden administration wanted to squash innovation in the market to pave the way for a CBDC, which “will give the federal government unprecedented insight into the lives of ordinary citizens.” , criticized that Chairman Gensler finally revealed. “I’m going to fight to make sure this doesn’t happen,” he said.

“We don’t need cryptocurrencies anymore,” said Gensler, as fiat currencies such as US dollars, euros and yen have already been digitized.

Senator Cynthia Lumis, a known crypto advocate, also released a statement in response to the SEC’s Coinbase lawsuit.

My statement on the SEC suing Coinbase, inc. https://t.co/5KNEM0IPSV pic.twitter.com/EgRIxrIcjj

— Senator Cynthia Lummis (@SenLummis) June 6, 2023

The SEC has failed not only to provide a path for exchanges to register, but also to provide adequate legal guidance for distinguishing between securities and commodities. He argued that the SEC’s continued enforcement regulations hurt consumers, and true consumer protection required creating a more robust framework that exchanges could comply with.

Lumis is bipartisan in pushing the Responsible Financial Innovation Act (RFIA) as a comprehensive regulatory proposal for cryptocurrencies.

connection:U.S. Lawmakers Take Two Initiatives Toward Comprehensive Crypto Regulation Bill

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