To establish clear rules for digital assets, Coinbase continuously requests a writ of mandamus to compel the SEC to respond to its rulemaking petition.
- In support of their request for rulemaking on digital assets from the SEC, Coinbase has sent a reply.
- To force the SEC to reply to the petition, Coinbase filed a writ of mandamus in April. If the petition is denied, further legal action may follow.
Introduction
Popular cryptocurrency exchange Coinbase recently submitted a reply in support of its petition to the U.S. Securities and Exchange Commission (SEC) for a writ of mandamus. The corporation wants to force the SEC to act on digital assets and provide precise guidelines and procedures for their offering and trading.
Background on Coinbase’s Petition
In July, Coinbase filed a petition with the SEC asking that regulations be created and put in place for securities issued and traded using digitally native methods. Fifty questions were included in the petition for the organization to take into account when drafting these regulations. According to Coinbase, the SEC allegedly rejected their petition without making the decision known to the public.
Alleged Inaction by the SEC
According to a filing by Coinbase on May 22, the SEC has yet to act on any of the five requests for rulemaking relating to digital assets it has received since 2017. Concerns are raised regarding the SEC’s responsiveness and commitment to resolving regulatory issues with digital assets in light of this alleged pattern of inactivity. With the SEC actively pursuing enforcement on issues comparable to those covered in the regulation petition, Coinbase claims that the agency’s lack of response is uncommon.
Coinbase’s Writ of Mandamus
When the SEC did not respond by the end of April, Coinbase initiated the necessary legal action and requested a writ of mandamus from the U.S. Court of Appeals for the Third Circuit. The SEC is compelled to reply to the petition through this formal request. Coinbase may take further legal action against the SEC to enforce rulemaking on digital assets if it rejects the plea under the writ.
SEC’s Response and Chair Gensler’s Speech
At first, the writ of mandamus received no response from the SEC. Nevertheless, the SEC released a brief on May 15 pleading with the court to reject Coinbase’s petition after a court order required the agency to do so. The SEC stated that Coinbase’s request was unreasonable and that it might take years to finalize the regulatory process. Interestingly, SEC Chair Gary Gensler alluded to current securities laws when he said in a speech that day that the regulations for the cryptocurrency market had already been established.
Coinbase’s Request for Timely Response
The SEC should have to answer Coinbase’s petition within seven days, according to the company’s most recent filing, or give an explanation and set a timeframe for a response. Coinbase wants to speed up the procedure and get more information about the regulatory environment surrounding digital assets.
Conclusion
The company’s dedication to creating clear and thorough regulations for digital assets is evident in Coinbase’s repeated efforts to obtain a response from the SEC about its rulemaking petition. The petition aims to develop a framework that supports investor safety and market integrity while addressing the regulatory ambiguity surrounding cryptocurrencies. The outcome of the court case between Coinbase and the SEC will significantly impact how cryptocurrencies are regulated in the future in the United States. The regulatory environment for digital assets will likely be shaped if the court grants Coinbase’s request for a mandamus and orders the SEC to act promptly on the regulation petition.
