Coinbase sues SEC: Please respond to the crypto rule petition in a timely manner
Recently, U.S. regulators have been taking frequent actions in the cryptocurrency industry. Coinbase has taken the lead in filing a lawsuit, and the issue of regulatory clarity in the crypto industry seems to have reached a point that must be addressed.Author: Coinbase
Compiled by: Felix, PANews
Today (April 24), Coinbase filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) in federal court. This is due to Coinbase's petition sent to the SEC in July 2022, hoping to provide guidance for the crypto industry through the formal rule-making process, but the SEC has not given a formal response for a long time, thus Coinbase has no choice but to seek a formal response from the SEC through litigation. The rule-making process exists to allow agencies to create regulations based on public opinion and to test the agency's position through judicial review. So far, more than 1,700 entities and individuals have submitted opinions on Coinbase's petition, responding to the request for clarification.
According to the Administrative Procedure Act (APA), the SEC is required to respond to Coinbase's rule-making petition "within a reasonable time." If the SEC denies the petition (the SEC has the authority to do so), then Coinbase will challenge this decision in court and will explain in a formal setting why the crypto industry needs rules to be established. Therefore, once the SEC and any other agency requested to make rules make a decision, they must respond to the petition, especially in the case of denying the petition; otherwise, the public will never be able to exercise its right to ask the court whether the agency's decision is appropriate.
From the SEC's public statements and enforcement actions against the crypto industry, it seems that the SEC has decided to deny the petition. However, this has not been communicated to the public. Therefore, the lawsuit filed by Coinbase today is simply hoping the court will require the SEC to publicly respond to the petition. It may feel unusual to escalate to litigation, and indeed it is, because this process is usually not necessary. However, it is also unusual for an agency to take enforcement action without having formally disclosed its legal opinion to the public. Similarly, Coinbase is not asking the court to instruct the agency on how to respond. It only hopes the court will order the SEC to respond, as the SEC is legally obligated to do so.
Coinbase does not take any litigation lightly, especially when it involves regulatory agencies. The crypto industry should have been clearly regulated long ago. Without being informed of how the SEC believes the law applies to Coinbase's business, Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC. The rule-making process is a key step in informing the public about which activities are permissible and which are not. Therefore, until the crypto industry receives clear regulation, Coinbase will continue to take all possible measures to strive for regulatory clarity, including today's filing. Coinbase is always willing to engage in dialogue with the SEC and all regulatory agencies on these issues.
Coinbase believes that cryptocurrency and blockchain technology have the potential to increase economic freedom and development opportunities around the world. This is why Coinbase is working to help modernize the financial system by building scalable crypto applications and trustworthy products. Coinbase's decision to go public in the U.S. is based on the belief that the U.S. is a very suitable place to lead technological change through blockchain technology. However, federal government leaders and regulatory agencies have taken a disjointed approach to regulation through enforcement, which could negatively impact the competitiveness and national security of the U.S.
Coinbase believes that in seeking clear regulation in the U.S., it has an obligation to make every effort for the industry, customers, shareholders, and employees. The lawsuit filed by Coinbase today is a small but important part of the ongoing call for Washington leaders to establish clear rules over the years. Coinbase recognizes that the crypto industry needs rules and has already requested rule-making. The lawsuit filed by Coinbase against the SEC today is an attempt to compel the establishment of basic regulations. This situation should not have occurred, but it has, and all individuals in the crypto industry will continue to wait for the final outcome.
