Coinbase files a court action to force SEC to respond to rulemaking petition

Coinbase files a court action to force SEC to respond to rulemaking petition

Coinbase wants to force the SEC’s response to its petition for rules in the crypto industry. This request has been pending since last July.


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Coinbase filed a lawsuit in the United States Federal Court to force the securities regulator of the country to give a “yes” or “no” answer to a petition the exchange had been pending since July.

The petition asked the Securities and Exchange Commission to adopt and propose clearer regulatory guidelines regarding the cryptocurrency industry.

In its petition the exchange requested that the financial regulator answer 50 specific questions regarding the regulatory treatment for certain digital assets. The questions range widely in terms of scope and content, asking for clarifications from the SEC on how it classifies tokens as securities.

The action came with a blog posting by Coinbase’s Chief Legal Officer Paul Grewal. Grewal said that the Administrative Procedure act required the SEC respond to the exchange’s rulemaking petition within a “reasonable time.”

The exchange wants to know what happened after nine months without a response.

It seems that the SEC is already deciding to reject our petition. They haven’t yet told the public. The action Coinbase filed asks for the court to request that the SEC share its decision.”

Grewal said that it is important for the SEC, and any other agency asked to make a rule, to respond to the request once they have made a decision. This is especially true if their answer to the petition was no.

Grewal said that it is important to be clear on these issues, particularly in light of the fact that Coinbase has received a Wells Notice on March 22 which suggests that enforcement action could be taken against the crypto exchange.

Grewal said that “Coinbase, and other crypto companies, are potentially facing regulatory enforcement actions by the SEC even though we were not told how they believe the law applies to us.”

Kraken and the SEC settled on Feb. 9 for “failing” to register their staking as a service program, which was deemed securities by the SEC . The exchange has agreed to stop operating its staking as a service program for U.S. clients and paid a fine of $30 million.

The move was not well received by the SEC. SEC Commissioner Hester P. Peirce criticized her agency’s actions for being “not efficient or fair” in their regulation and criticised it for closing down a program that had served its users well.

Related SEC’s ‘brute-force’ crypto regulation attempt was a ‘bad policy’ — Paradigm

In February, the SEC ordered Paxos (the issuer of Binance USD, a stablecoin pegged to the U.S. Dollar ) to cease minting and issuing tokens.

As part of her Senate campaign, Democratic Massachusetts Senator Elizabeth Warren said on March 31, that as a major component of her re-election bid for the Senate she would form a “anti-crypto Army”.

A screenshot of a video shared by Warren for her re-election campaign promising to build an “anti-crypto army.” Source: Twitter

Coinbase announced its plans to relocate part of its operation to another country as the U.S. continues to oppose the crypto industry. Coinbase was granted a license on April 19 to operate Bermuda. It is now reportedly looking to launch a binary options exchange in Bermuda as early as this week.

Analysts will look at the earnings report of Coinbase on May 4, to gauge the overall health of the crypto industry in the U.S.

Updated (April 25, 3:15 am UTC). This article now includes more information about Coinbase’s actions and blog posts, as well as background information.

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