Coinbase Challenges SEC's Denial of Crypto Rulemaking Request
Summary:
Coinbase, the cryptocurrency exchange, challenges the U.S. Securities and Exchange Commission's (SEC) denial of its rulemaking request concerning securities-grade crypto. Reacting immediately to the December 15 decision, Coinbase appealed to the U.S. Third District Court of Appeals, which ordered the SEC to document its decision by January 24, 2024. The company has taken various steps to back the crypto industry, including legal action, lobbying, and public campaigns.
Coinbase is persisting in their quest to facilitate proper regulation for cryptocurrencies deemed as securities. The petition submitted to the U.S. Securities and Exchange Commission (SEC) was rejected on December 15, prompting the crypto trading platform to challenge this ruling on the very same day. Paul Grewal, Coinbase's top legal officer, assured immediate recourse once he became aware of the SEC's rejection. The SEC has been ordered by the U.S. Third District Court of Appeals to provide details of its decision by January 24, 2024. In their appeal, Coinbase detailed the extensive measures taken to get a response to their petition from the SEC, terming the denial as "irrational and despotic, an excessive exercise of authority, and not in accordance with the law, breaking the rules of the Administrative Procedure Act”.
Critically, Coinbase accused the SEC of evading the authority the APA gives it and running a crusade of regulation by enforcement against Coinbase and other entities in direct violation of their statutory authority. The SEC rendered the Coinbase petition unsatisfactory citing absence of the "context or essence of any proposed regulation" as is necessary for such applications. The SEC dismissed the petition's assertion that the current regulations were "unenforceable", clarifying that determining the priority and cadence of regulations is within the SEC's discretion. Many in the crypto community reacted negatively towards this rejection.
According to a recent report, Coinbase CEO has stated that leaving the US is "not even an option at this moment." SEC Chair Gary Gensler made a statement echoing the official refusal.
Coinbase, a San Francisco-based company, has participated in numerous activities advocating for the cryptocurrency sector, such as political contributions, public campaigns and lobbying efforts. The SEC filed a lawsuit against Coinbase in June for securities transgressions.
Published At
12/19/2023 12:33:23 AM
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