Home / SEC Responds to Coinbase’s “Baseless” Demand for Regulatory Framework: Says No
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SEC Responds to Coinbase’s “Baseless” Demand for Regulatory Framework: Says No

Published June 14, 2023 1:24 PM
Omar Elorfaly
Published June 14, 2023 1:24 PM

Key Takeaways

  • Coinbase petitions the federal government to press the SEC to move forward with creating clear regulations concerning crypto trading
  • SEC stalls by asking for a 120-day extension
  • Coinbase executives fire back saying “they refuse to commit to any deadline despite the Court’s explicit order”

Coinbase filed a mandamus petition to the federal government in April, requesting that the SEC would provide “clarity on regulations regarding crypto”. After months of silence, the SEC responds by stating “mandamus petition should be denied.”

The official petition  made by Coinbase requests that SEC delivers on its promise to create regulations that would remove confusion and legal discrepancies from the industry. 

The SEC responded  to the petition, stating “Coinbase has no right to mandamus, which orders a government agency to fulfill certain duties.” The SEC’s response went on to state that “Coinbase instead asserts that this Court should compel the Commission to act on Coinbase’s recently filed rulemaking petition. But no statute or regulation requires the Commission to take such action on a specific timeline.”

“Commission has not decided what action to take on that petition in whole or in part—which is entirely reasonable given the breadth of the rulemaking petition and the fact that it was filed just months ago and supplemented by Coinbase more recently,” reported lawyers of the SEC, adding that “Commission staff anticipates being able to make a recommendation to the Commission regarding Coinbase’s rulemaking petition within the next 120 days.”

Coinbase Fires Back

This is, understandably, not only frustrating for Coinbase and their CEO Brian Armstrong due to the ongoing lawsuit filed by the SEC against them but it also confirms their claims that the SEC, led by Chair Gary Gensler has failed to address the crypto regulation issue in a timely manner with much-needed clarity.

Coinbase’s Chief legal officer Paul Grewal took to Twitter  to comment on the SEC’s response to the petition, saying “They [SEC] ignore the clear statements of the Chair that confirm they have no intent to issue new rules, and instead conflate the evidence of a decision those statements provide with an argument that the statements are themselves a decision.”

SEC Needs Change Of Leadership

This all goes on while members of Congress demand the removal of Gary Gensler from the leadership of the SEC in a put forth by House Majority Whip Tom Emmer and Rep. Warren Davidson, under the name of the SEC Stabilization Act.

In Davidson’s Congress speech, he states that “U.S. capital markets must be protected from a tyrannical Chairman, including the current one,” adding that “That’s why I’m introducing legislation to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come. It’s time for real reform and to fire Gary Gensler as Chair of the SEC.”

Tom Emmer added that “American investors and industry deserve clear and consistent oversight, not political gamesmanship. The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless Chair.”