Crypto Exchange Coinbase Sues SEC Over Regulatory Petition

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Coinbase has filed a petition to compel the U.S. Securities and Exchange Commission to respond to a months-old petition asking whether the securities regulator would allow the industry to be regulated using existing SEC frameworks, it said Monday. the exchange firm, escalating tensions with the regulator which has stepped up enforcement actions and warnings against crypto firms, including the US giant.

In the July 2022 petition, Coinbase asked if the SEC would “propose and adopt rules to govern the regulation of securities offered and traded through digital native methods.” The SEC never responded to the petition.

“The rule-making process exists so that agencies can develop regulation with the benefit of public input and have their position tested through judicial review. To date, over 1,700 entities and individuals have submitted comments to Coinbase’s petition echoing the request for clarity,” Coinbase Chief Legal Officer Paul Grewal wrote in a blog post.

Grewal claimed that based on public statements from the SEC and enforcement activity in the crypto industry, it appears that the regulator has already decided to deny Coinbase’s petition, “but they don’t. have not yet told the public”.

The petition, filed Monday with the United States Court of Appeals for the Third Circuit, is the latest pushback the SEC has received in recent months as the regulator pushes actions against crypto firms Bittrex, Gemini, Genesis , as well as entrepreneurs such as Justin Sun and Do Kwon.

Last month, the SEC threatened to sue Coinbase over some of the exchange’s products. Coinbase is the gold standard among crypto exchanges for compliance with laws, but the US-based company has suffered over the years as it could not develop and roll out new products due to legal uncertainties even as its rivals grow. expand into international markets.

Brian Armstrong, co-founder and chief executive of Coinbase, said the exchange may consider moving its headquarters outside the United States unless the country changes its approach to regulation. “Everything is on the table, including, you know, moving or whatever is necessary,” he said last week.

“Coinbase takes no litigation lightly, especially when it involves one of our regulators. Regulatory clarity is overdue for our industry. potential regulatory enforcement from the SEC, although we were not told how the SEC thinks the law applies to our business,” Grewal wrote.

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