Game On: Coinbase Begins A Fight With SEC Following Rulemaking Decision

Coinbase decided to begin a fight with the SEC following the entity’s latest decision. Check out the latest reports about this below.

Coinbase, a cryptocurrency exchange, is pursuing legal action after the U.S. Securities and Exchange Commission (SEC) declined its request for rulemaking.

In July 2022, Coinbase filed a petition with the SEC to establish a new regulatory structure for digital assets.

However, the regulator denied the proposal, stating that it disagreed with the notion that securities laws do not apply to the crypto industry.

Says the SEC in a letter to Coinbase dated December 15th, 2023,

“The Commission disagrees with the petition’s assertion that application of existing securities statutes and regulations to crypto asset securities, issuers of those securities, and intermediaries in the trading, settlement, and custody of those securities is unworkable. Moreover, the Commission has discretion to determine the timing and priorities of its regulatory agenda, including with respect to discretionary rulemaking such as that requested in the petition.”

Coinbase’s chief legal officer, Paul Grewal, has announced that the exchange is seeking court assistance to review the SEC’s decision. In a statement, he said, “Promise made, promise kept: we are now on file with Third Circuit to challenge the SEC’s arbitrary and capricious denial of our petition for crypto rulemaking. We again appreciate the Court’s consideration.”

Coinbase has petitioned the court to review the securities watchdog’s denial of its rulemaking petition, which it believes is arbitrary and capricious, an abuse of discretion and in violation of the Administrative Procedure Act (APA), which is responsible for governing how federal agencies develop and issue regulations.

“The Commission’s refusal to engage in rulemaking, even while it continues a campaign of regulation by enforcement against Coinbase and others that exceeds its statutory authority, flouts the APA and fundamental principles of fairness it embodies. Coinbase respectfully requests that the Court hold unlawful, vacate, enjoin, and set aside the Order; direct the Commission to commence rulemaking; and provide such additional relief as may be appropriate.”