Coinbase Slams 'Evasive Response' from SEC to Court Order

After a protracted silence and vague responses from the United States Securities and Exchange Commission, cryptocurrency company Coinbase filed an official request in federal court on Saturday.

“We couldn't wait until our deadline next week to address the SEC's response to the June 6 order from the Third Circuit,” tweeted Paul Grewal, Chief Legal Officer for Coinbase. “It is unusual for the government to defy a direct question from a federal court.”

“The SEC’s evasive response goes further, as we set out today,” he added.

According to the Coinbase filing, the company is requesting “mandamus,” which refers to a court order issued by a higher court to a government agency, commanding them to perform a specific action or duty that they are legally obligated to do. 

In layman’s terms, Coinbase is asking a federal judge to force the SEC to set clearer rules and standards for the digital assets industry–the objective of a petition made by the crypto exchange last year.

Coinbase Asks Court to Force SEC to Clarify Crypto Regulations

Cryptocurrency exchange Coinbase took action against the Securities and Exchange Commission (SEC) late Monday, asking a federal court to compel the agency to respond to its demand for clearer crypto regulations. The exchange sent the SEC its so-called “petition for rulemaking” last July, and asked the regulator to propose and adopt rules for digital assets securities. It also sought answers to 50 specific questions that would provide “clarity and certainty regarding the regulatory treatment of d...

Although the SEC never responded to that petition, it sued the cryptocurrency company earlier this month alleging that it failed to register as an exchange, clearing house, and broker, despite providing investors these services. The lawsuit also claims that Coinbase sold unregistered securities on their platform.

A judge took note of the SEC’s action against Coinbase, and ordered the federal regulator to respond to the petition. In response, Coinbase said it was still considering what actions it might take.

“The Commission’s refusal to say how much additional time it needs to act on Coinbase’s petition confirms that further delay is futile,” tweeted Grewal, saying, “At a minimum, the Court should order the Commission to report on Its action.”

'SEC Has No Intention' of Providing Clear Rules for Crypto: Coinbase

Coinbase accused the U.S. Securities and Exchange Commission (SEC) of deliberately ignoring its petition for adopting clear rules for the crypto industry, even though the decision has not been made public. In its latest filing to the Third Circuit of the U.S. Court of Appeals, Coinbase also pointed to public comments previously made by SEC Chair Gary Gensler, saying that "the SEC’s and its Chair’s words and actions leave no doubt of the agency’s plans." Coinbase sent the SEC its so-called “petit...

Coinbase had some incendiary rhetoric for the SEC, saying it “pushes the limits of cognitive dissonance” by demanding compliance with non-existent rules.

The commission, led by chairman Gary Gensler, has insisted that clear rules already exist. Even so, the agency has been in the news recently, requesting that the courts deny Coinbase’s request for clearer rules.

Coinbase has been steadfast and relentless over its quest for a definitive regulatory scheme, although they have said in the past that the SEC has no intention of establishing one. Saturday’s filings reiterated that stance, the crypto exchange saying the agency has been “inconsistent” in creating, in fact, a “Catch-22” for the industry.

Although Gensler has said that the SEC “stands ready to help,” their actions suggest otherwise.