Coinbase Accuses SEC of Ignoring Petition for Clear Crypto Rules

Crypto exchange Coinbase filed a writ of mandamus against the US SEC shortly after the SEC stated it was in no hurry to respond to Coinbase’s demands for regulatory clarity.

In the ongoing dispute between cryptocurrency exchange Coinbase and the United States Securities and Exchange Commission (SEC), tensions have reached a new high as the exchange submits its third filing to the Third Circuit of the US Court of Appeals.

Coinbase’s chief legal officer, Paul Grewal, announced the news on Twitter:

Late last night Coinbase replied in the Third Circuit to the SEC’s arguments against our petition for a writ of mandamus. Mandamus is the tailor-made remedy for the extraordinary facts presented here. We continue to appreciate the Court’s consideration. https://t.co/OD02kX3524

— paulgrewal.eth (@iampaulgrewal) May 23, 2023

In the filing, Coinbase accused the SEC of purposefully ignoring its petition for adopting clear rules for the cryptocurrency industry despite the SEC’s decision not being made public yet. The exchange also referred to public comments by Gary Gensler, saying, “the SEC’s and its Chair’s words and actions leave no doubt of the agency’s plans,” according to reports by Decrypt.

Coinbase Files Writ Mandamus Petition

In its mandamus petition, Coinbase’s main arguments state:

Mandamus Is Warranted Because The SEC Has Made Up Its Mind To Deny Coinbase’s Petition.

The SEC does not deny that its delay in responding to Coinbase’s rulemaking petition would be unreasonable, and that mandamus would be warranted, if the agency has determined not to engage in the rulemaking process Coinbase request.

A writ of mandamus refers to a legal petition that compels a government agency to fulfil its statutory obligations.

Coinbase’s latest petition comes after the SEC refused to entertain the exchange’s request for immediate clarity of cryptocurrency regulations. In its May 15 brief, the SEC filed a response to Coinbase’s petition in April, and it was not prepared to provide clarity on current crypto regulations.

The agency further stated it is not obligated to meet the requirements set out in Coinbase’s petition. It said the exchange requested complex rulemaking in an unreasonably short amount of time.

In that filing, the SEC asked the court to deny Coinbase’s petition for mandamus, arguing it is an “extraordinary remedy” that Coinbase does not, and cannot, demonstrate a right to relief. The exchange filed a narrow action lawsuit at the end of April, compelling the SEC to give a ‘yes or no’ answer’ to a petition filed in July 2022, which went unanswered for nine months.

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