Coinbase CLO Paul Grewal criticized a minimalist legal filing from the US Securities and Exchange Commission (SEC). January 30.
Grewal wrote in a post on X:
“Below you will find the administrative details of [the SEC’s] decision denying our petition for digital asset rules. Find out for yourself if it’s even close to complete or enough to justify their decision.
Coinbase originally filed a petition for regulation in June 2022. There it requested the SEC to establish clearer rules for the crypto industry.
The SEC denied the request on December 15, 2023, because it disagreed with Coinbase that existing securities regulations surrounding crypto are insufficient.
The SEC’s latest filing, dated Jan. 24, is a review of the documents leading up to the December decision. The linked documents largely contain comments from individuals outside the SEC and announcements of meetings between the SEC and Coinbase. Neither document type explains the SEC’s position on this issue, and all are presented in the current filing without further comment from the SEC.
Only the SEC’s initial acknowledgment of the petition and final denial letter (both of which are included in the final filing) arguably provide significant information about its position on the issue.
Coinbase continues to push for review
Although the SEC denied Coinbase’s petition in December, Coinbase asked the court to reconsider the request after that outcome.
Grewal detailed the timeline for upcoming legal proceedings in his X-post today. He said Coinbase’s letter is due March 11, the SEC’s letter is due April 10, and Coinbase’s response is due May 1. He added that Coinbase “appreciates it[s] the Third Circuit’s consideration.”
Coinbase’s request is important because the SEC charged the company with securities law violations in June 2023. Although the two cases are separate, Coinbase has referred to one case in relation to the other. In March 2023, Coinbase anticipated the SEC’s allegations, stating in a public blog post that it tried to ask for clear rules through its rulemaking petition but “received legal threats instead.”
It is unclear whether the outcome of the petition will play a role in the securities law violation case. However, clearer rules could reduce the likelihood of further SEC enforcement against Coinbase and other companies in the future.
