Coinbase’s Chief Legal Officer advocates for Court intervention to compel a response from the SEC regarding the company’s lawsuit. The crypto exchange asserts that the SEC should make a decision within 60 days to prevent unwarranted delays. Coinbase further alleges that the SEC’s actions, perceived as aggressive, have the potential to adversely affect the crypto industry.
In a tweet on June 17, Coinbase’s Chief Legal Officer, Paul Grewal, expressed that the company cannot afford to wait until the upcoming week’s deadline for the US Securities and Exchange Commission (SEC) to respond to the order from the Third Circuit Court on June 6. The statement highlights Coinbase’s urgency in seeking a timely response from the SEC in the ongoing legal proceedings.
As per the filing, Paul Grewal stated that the Commission’s lawsuit against the company, alleging the listing of tokens as unregistered securities, lacked grounds because the agency had not established specific rules during a period when Coinbase sought regulatory guidance last summer. Grewal’s argument suggests that the absence of clear regulations at the time makes the Commission’s action unfounded. The filing highlights Coinbase’s position regarding the regulatory landscape and its call for clearer guidance from the SEC.
We couldn't wait until our deadline next week to address the SEC's response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court. But the SEC’s evasive response goes further, as we set out today. 1/5 pic.twitter.com/ssULmUpzi2
— paulgrewal.eth (@iampaulgrewal) June 17, 2023
The largest cryptocurrency exchange in the United States, Coinbase, additionally contended that the SEC purposely evaded the Court’s query regarding the regulatory deadline, choosing instead to preemptively anticipate staff recommendations. Coinbase’s argument suggests that the SEC deliberately avoided addressing the Court’s question directly and attempted to steer the focus towards anticipated recommendations rather than the regulatory timeframe. This assertion underscores Coinbase’s position on the SEC’s approach and its efforts to highlight perceived discrepancies in the agency’s actions.
At a minimum, the Court should order the Commission to report on Its action –not an "anticipated" staff "recommendation"– in no more than within 60 days and decide the mandamus petition promptly If the Commission still has not acted at that time. 4/5
— paulgrewal.eth (@iampaulgrewal) June 17, 2023
The government’s refusal to undergo a direct investigation in federal court is an uncommon occurrence. Consequently, Coinbase argues that the court should issue an executive order due to the SEC’s denial of Coinbase’s rule-making petition and its perceived harmful impact on the industry. The SEC’s failure to provide a timeframe for complying with Coinbase’s request reinforces the notion that further delays would be futile. As a result, Coinbase urges the court to compel the SEC to report its actions within 60 days, and if the SEC fails to act within that timeframe, the court should promptly make a ruling on the enforcement order.
In a recent development, the judge presiding over the SEC case has been replaced in less than 10 days since the plaintiffs filed charges. The regulatory body initiated a series of lawsuits targeting major crypto exchanges globally, including Coinbase and Binance. Coinbase, a prominent US-based exchange, specifically faced allegations of providing unregistered securities through a staking program offered as a service. This change in the assigned judge adds a new dimension to the ongoing legal proceedings surrounding these high-profile cases.
Despite the subsequent lawsuits, the crypto market displayed minimal adverse reaction, coinciding with a sustained decline in asset prices triggered by news of the US regional banking crisis. This observation indicates that the legal actions against major crypto exchanges did not significantly impact the overall sentiment and trading dynamics within the crypto market during a period of ongoing market downturn.
Judge Katherine Polk Failla has taken over from Judge Jennifer Rearden in the SEC Coinbase case. Notably, Judge Rearden had previously presided over another crypto-related lawsuit involving Tether and Bitfinex. While the reason for the replacement remains unclear, it is speculated that Judge Failla’s past experience and familiarity with crypto terminology played a favorable role in her selection. This change in the assigned judge brings a level of expertise and understanding of the crypto industry to the ongoing proceedings.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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