Coinbase contends that the existing regulations are ill-suited for digital assets. The SEC has been given a deadline of one week to clarify its position regarding Coinbase’s petition
The Third Circuit Court of Appeals has summoned the U.S. Securities and Exchange Commission (SEC) to provide further clarification regarding its position on a rulemaking petition submitted by cryptocurrency exchange Coinbase (COIN).
In response to Coinbase’s argument that the existing regulations are inadequate for digital assets, the company filed a challenge under the Administrative Procedure Act in April.
Also Read This Related: SEC seeks dismissal of Coinbase’s request for rules clarification
The purpose of the challenge was to compel the SEC to respond to Coinbase’s petition for formal rulemaking in the digital assets sector, which was originally filed in 2022.
7 Days Time for SEC
The SEC is required to provide an explanation within the upcoming week regarding its decision on whether to reject Coinbase’s application, the rationale behind such a denial, and the anticipated timeline for reaching a final verdict.
Paul Grewal, the Chief Legal Officer of Coinbase, emphasized the importance of establishing clear rules and regulations through legislation or rulemaking prior to enforcement actions. Grewal highlighted that Coinbase’s initial petition to the SEC for rulemaking almost a year ago stemmed from this fundamental principle.
The SEC has filed a lawsuit against Coinbase, claiming that the company is operating an unlicensed securities exchange. Additionally, the regulatory body is obliged to provide an explanation regarding why the court should not continue its oversight of the case and why the SEC has not fulfilled Coinbase’s request for regular updates on regulations.
Grewal further expressed the belief that the SEC’s decision to initiate litigation against Coinbase and the broader industry, as demonstrated by the case filed against Coinbase, indicates that the SEC has already made up its mind to reject Coinbase’s petition for rulemaking.
Contrarily, Ark Invest, led by Cathie Wood, increased its investment in Coinbase Global Inc. on June 6, following a significant decline in the company’s shares to their lowest point in over five months. This decline was attributed to the regulatory actions taken by the Securities and Exchange Commission against the cryptocurrency industry.
Also Read This Related: Coinbase Derivatives Exchange Set to Roll Out BTC and ETH Futures on June 5
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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