US-based exchange giant Coinbase is seeking regulatory clarity on crypto from the US Securities and Exchange Commission (SEC).
The largest US crypto exchange has filed a motion in court to compel the SEC to respond to a previous petition from the company seeking guidance for the digital asset industry.
Coinbase first filed the regulatory petition last July, but has yet to hear a “yes” or “no” response to the request.
Paul Grewal, chief legal officer at the exchange, explains:
“The Administrative Procedure Act (“the APA”) requires the SEC to respond to Coinbase’s regulatory petition within a reasonable time.” If the SEC says no to our regulatory petition, which it has the right to, then Coinbase would be allowed to challenge that decision in court and explain in that formal setting why regulation is required.
So it is important that the SEC and any other agency that has petitioned for regulation respond to the petition as soon as the agency has made a decision, especially if the answer is no – otherwise the public will never be able to exercise its right to to ask the court whether the decision of the authority was correct.”
Grewal argues that the SEC’s public comments and enforcement actions suggest that the regulator has already decided to deny the petition, but they are simply choosing to withhold that decision from the public.
“So the action Coinbase filed today simply asks the court to ask the SEC to share its decision. This step may feel unusual, and it is, because this step is usually not necessary. But it is also unusual for an agency to take enforcement action based on a legal opinion that it has not yet formally shared with the public.”
Last month, the SEC sent a Wells Notice to Coinbase, saying they had made a “preliminary decision” to recommend filing an enforcement action against the crypto exchange for allegedly violating securities laws.
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