The SEC seeks to dismiss Coinbase’s petition regarding the impending cryptocurrency rules

The United States Securities Commission has finally filed a formal court response regarding Coinbase’s petition for clear regulation of cryptocurrencies, noting that any rulemaking could take years and that enforcement action will continue in the meantime.

According to court documents filed May 15, the SEC argued that it had no obligation to meet Coinbase’s requirements outlined in its petition, while also arguing that the company advocated an unreasonably complex set of reforms and rule-making. short period of time.

The securities regulator has asked the court to deny Coinbase’s petition for the note, arguing that forcing is an “extraordinary remedy” and that Coinbase “neither shows nor can it prove its right” to the exemption.

Coinbase’s chief legal officer, Paul Grewal, said in a Twitter thread that the filing may be the first time the securities regulator has explained its views on whether the SEC should create rules for the crypto industry. He also said that there was still a lot on the table that needed to be clarified.

“The SEC has told the court that rulings could take years and they are in no rush,” he said, adding:

“The SEC has acknowledged that it will continue to use enforcement action as an alternative to rule-making for the foreseeable future, but not to worry — such enforcement action may eventually ‘inform’ a rule-making process that is not yet planned.”

Just hours before the filing, SEC Chairman Gary Gensler delivered a keynote address at a financial markets conference, arguing that crypto rules had already been published and were sufficient.

Interestingly, in its latest filing, the SEC distanced itself from any public comments and views of its chair, though it seemed more relevant to comments related to Gensler’s views that most cryptocurrencies are classified as security.

“The SEC has also said that public statements made by Chairman Gensler are not official guidance or policy statements from the SEC and the public cannot rely on them as such,” Grewal explained.

Ultimately, the regulator argued that it should not be forced to set rules for the digital currency industry.

An excerpt from the SEC’s response to the Coinbase petition. Source: Courtlistener

“Neither the securities laws nor the Administrative Procedure Code places the SEC under an obligation to issue the broad new regulations on ‘digital assets’ that Coinbase has requested,” the SEC stated, adding that:

As Coinbase’s own submissions demonstrate, considering the different paths it proposes is necessarily a complex endeavor. However, Coinbase submitted its rulemaking petition less than ten months ago, completed aspects of the petition less than three months ago, and sought to complete the record again. another just a few weeks ago.”

Part of the SEC’s argument for the denial request is based on the assertion that Coinbase “cannot convincingly claim” that the SEC suffered any harm by not acting on the petition since it was initially filed.

Related: Coinbase establishes advisory board with former US lawmakers

Nor can conclusive evidence that the SEC’s recent enforcement actions on the crypto sector point to “the Commission’s decision not to engage in rule-making”.

“The Commission continues to consider Coinbase’s petition in the normal course,” the agency said.

“Overall, the SEC’s response reinforces Coinbase’s longstanding concern that our industry has no clarity on what the SEC may consider to be within or outside its jurisdiction at any given time, and will likely continue to change its mind along the way.” Grewal said.

magazine: Crypto Regulation – Does SEC Chairman Gary Gensler Have the Final Word?

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