The SEC stated that implementing regulatory changes will be a complex and time-consuming process, indicating no immediate action.
The U.S. Securities and Exchange Commission (SEC) has asked the judge to reject Coinbase’s request for the agency to provide a response to their rulemaking petition. Coinbase had submitted the petition last year, seeking clarity on how cryptocurrency falls under securities laws.
Coinbase filed a lawsuit against the SEC last month, stating that the agency has been slow and unreasonable in responding to their request. The exchange is also seeking a formal process that would allow the public to provide their input on the matter.
In their court document filed on May 15, the SEC dismissed Coinbase’s claims as unfounded. The lawyers representing the Commission stated in their filing:
“The SEC argues that Coinbase cannot expect special treatment or expedited regulatory action. Therefore, the court should reject Coinbase’s petition.”
SEC Chair Gary Gensler has consistently stated that many digital assets should be considered securities under current regulations. However, members of the cryptocurrency industry argue that the SEC should not apply the same rules to digital assets as it does to traditional assets.
Coinbase Responds to SEC’s Request
Coinbase’s chief legal officer, Paul Grewal, noted that the recent filing by the SEC might be the first instance where the securities regulator has officially expressed its opinions in court regarding the creation of rules for the crypto industry.
Today, May 16, 2023, the SEC replied to Coinbase’s request for a writ of mandamus, which asked the court to compel the SEC to give a simple yes or no answer regarding whether it plans to create rules for the crypto industry. The SEC’s response? It’s uncertain, as they provided a vague “maybe” as their answer.
According to the SEC’s filing, they have emphasized that it will take time to evaluate and implement regulatory changes. They described this process as complex and necessary, and clarified that there is no specific deadline for completing this work. The SEC also pointed out that Coinbase has not experienced any negative consequences as a result of the agency’s inaction on their petition.
The SEC mentioned that it has the authority to address Coinbase’s petition and enforce the current legal requirements. At the same time, it can also explore potential amendments to those requirements.
According to the filing, Coinbase’s rulemaking petition requests the SEC to make a series of deliberate decisions to replace the current securities laws and regulations with a new set of rules specifically designed for the trading of cryptocurrency assets that are considered securities.
The SEC has taken strong actions against several cryptocurrency companies, including well-known players like Coinbase, Kraken, Binance, and others.
This information is for general knowledge only and should not be considered as advice for investing or making financial decisions