Actions taken by the US Securities and Exchange Commission (SEC) within the framework of legal regulations continue to receive reactions from many prominent figures. According to a statement by Coinbase, the company demands SEC to take immediate action for an application it made. If SEC fails to comply with this request, Coinbase officials will continue to seek their rights through the court.
Coinbase Sends a Warning to SEC
Coinbase accused SEC in a petition submitted to a federal court in Manhattan on October 13. According to Coinbase, SEC officials refused to take action regarding the exchange’s regulatory application made in July. In this case, Coinbase officials applied to the court due to a disturbing impasse.
Coinbase’s attorney Eugene Scalia stated that this situation means SEC admits to having no intention to act upon request. Scalia said SEC’s inaction leaves the cryptocurrency asset markets in an unprecedented situation:
“SEC’s non-illuminating report is merely a bureaucratic pantomime and confirms that it will not prompt the agency to take its obligations seriously other than through mandamus.”
Mandamus is a judicial order sent from a higher court to a lower court, directing the lower court to fulfill its legal duty.
The Battle Between Coinbase and SEC
Coinbase’s initial request was a rulemaking petition to SEC, asking the agency to clarify how companies can stay within the boundaries of federal securities laws. After a year passed since this petition, on June 6, SEC filed a lawsuit against Coinbase, alleging that it is an unregistered securities exchange. Following this lawsuit, the United States Court of Appeals for the Third Circuit ordered SEC to disclose whether it rejected Coinbase’s petition.
SEC Chairman Gary Gensler has repeatedly stated that existing laws already make it clear how crypto asset companies should comply with the laws, and accused Coinbase of refusing to comply with the rules. SEC stated in its October 11 application that it had issued advice from its staff to take action upon request, but Scalia said this response was inadequate and deliberate:
“SEC cannot hide behind opaque implications regarding ambiguous internal advice provided by its staff. The latest gambit to thwart judicial review of its actual denial.”
