The US Securities and Exchange Commission (SEC) has stated that it expects to require approximately four months to potentially address Coinbase’s request for rulemaking concerning digital asset trading.
The SEC has emphasized that it has not yet determined whether it will provide a response to the exchange’s request, and it has minimized the significance of their call for a quicker response, suggesting that it may be attributed to the perceived weakness of Coinbase’s argument. In a filing submitted to the United States Court of Appeals for the Third Circuit, the SEC reiterated its stance that the petition should be rejected.
The agency stated that Coinbase’s request for a writ of mandamus, urging the Commission to take action on its comprehensive rulemaking petition within a seven-day timeframe, lacks any valid grounds.
The Commission has not yet made a decision regarding the course of action to be taken on this cryptocurrency exchange platform’s petition, whether in its entirety or in part. This is considered reasonable due to the extensive nature of the rulemaking petition and the fact that it was submitted just a few months ago, with recent supplemental information provided by Coinbase.
Meanwhile, the SEC stated that this cryptocurrency exchange platform is obligated to comply with the existing legal requirements.
According to the agency, Coinbase’s request for more precise rulemaking aims to replace the current applicable regulations. The exchange’s request predates the SEC’s recent lawsuit against Coinbase, filed last week, alleging the trading of unregistered securities. On June 6, the courts requested the SEC to provide clarification on its stance regarding their petition within a seven-day timeframe.
Coinbase Raises Objections to SEC’s Reply
Coinbase’s Chief Legal Officer, Paul Grewal, expressed dissatisfaction with the response from the SEC on Twitter, asserting that it contained flawed reasoning and disregarded statements made by SEC Chairman Gary Gensler.
Grewal criticized the regulator for reiterating the claim that it has not made any decisions regarding new regulations, which he considers to be a “fallacy.” This is despite explicit statements from SEC Chair Gary Gensler asserting that there is no intention to issue new rules.
Additionally, Grewal pointed out the SEC’s refusal to commit to a specific deadline despite a clear court order.
The SEC’s delayed response comes in the wake of the recent legal action taken against Coinbase. The regulator filed a lawsuit against the leading cryptocurrency exchange, alleging the offering of unregistered securities and operating an unregistered securities exchange.
In April, Coinbase filed a lawsuit against the SEC in order to compel a response to its rulemaking request submitted in 2022. On the other hand, the SEC has maintained its position that regulations for digital assets already exist. As reported earlier, the agency has conveyed to the industry that there are existing rules and laws governing digital assets, although it may have reservations about them.