After Months Of Silence, Coinbase Sues The Securities And Exchange Commission

(CTN News) – On Monday, the crypto exchange Coinbase filed a lawsuit against the Securities and Exchange Commission (SEC), demanding that the SEC be forced to reveal its answer to a months-old petition regarding whether it will allow the crypto industry to be regulated using the existing frameworks of the SEC.

As part of the petition filed on July 20, 2022, the SEC was asked to propose and adopt rules governing the regulation of securities that are offered and traded through digitally native methods, referring to digital assets such as cryptocurrencies, as well as other digital assets.

In response to Coinbase’s petition, the SEC has yet to offer any specific public response, but in recent months, it has aggressively ramped up its enforcement actions and warnings against crypto exchanges, including Coinbase, in order to combat money laundering.

It appears the SEC has already decided to deny our petition based on its public statements as well as its enforcement activities in the crypto industry. Public announcement has not yet been made.

Paul Grewal, Coinbase’s chief legal officer, said in a blog post that the company just asked the court to share the SEC’s decision with the company.

In the past few months, the SEC has taken action against a number of crypto exchanges, including Bittrex and Gemini, as well as crypto lenders Genesis, as well as a number of individuals accused of manipulating crypto assets.

These include crypto entrepreneur Justin Sun and Terraform Labs founder Do Kwon, who remains in jail.

Having been warned by the SEC of pending legal action through a Wells notice a little over a month ago, Coinbase’s move represents the company’s first formal salvo against the regulator.

“We at Coinbase do not take any litigation lightly, in particular when it has to do with one of our regulators. Our industry is overdue for regulatory clarity, Grewal wrote in a blog post he published earlier this week.

Yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the Securities and Exchange Commission (SEC), even though we have not been informed as to how they believe the law applies to our business.

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