Coinbase has accused the Securities Exchange Commission (SEC) of avoiding its rulemaking petition as part of the ongoing legal case against the regulator. In April, the exchange sued the agency for failing to respond to its request for regulatory guidance for the digital asset industry. Coinbase had asked the SEC to issue regulatory guidelines by July 2022.

On June 13, the SEC informed the court that it had not yet made a decision on how to proceed regarding the petition. It added that there was no specific deadline for a response or requirement to provide periodic reports as requested by the plaintiff. In response, Coinbase’s defense team sent a letter reiterating previous claims that the SEC had refused to provide regulatory clarity while demanding compliance with non-existent rules.

Coinbase pointed out inconsistencies in the SEC’s approach, stating that the agency had yet to decide on its rulemaking policies, contradicting SEC Chair Gary Gensler’s statement that “The rules and regulations are already clear” in the days following the agency suing Coinbase. Coinbase argued that the agency was unlikely to engage in rulemaking, and a writ of mandamus was required to compel the agency to act.

Coinbase’s Criticism of the SEC

Further criticism was leveled at the SEC’s failure to address the overlap between its enforcement action against Coinbase and the exchange’s legal filing for clear rules. Coinbase accused the agency of legislating by enforcement, which is not a “lawful substitute” for providing rules defining cryptocurrencies and a path to registration.

The exchange urged the court to grant its mandamus petition, suggesting that the SEC’s refusal to provide regulatory guidance for the digital asset industry could harm innovation and investment in the sector. Coinbase also accused the SEC of ignoring the unprecedented nature of its conduct in pursuing both enforcement and rulemaking simultaneously.

Coinbase has criticized the SEC for its failure to provide regulatory guidance for the digital asset industry, and for its inconsistent approach to rulemaking. The exchange has accused the agency of legislating by enforcement, which it argues is not a “lawful substitute” for providing clear rules defining cryptocurrencies and a path to registration. Coinbase has urged the court to grant its mandamus petition, suggesting that the SEC’s refusal to provide regulatory clarity could harm innovation and investment in the sector.

Regulation

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