Coinbase Urges Third Circuit Court to Force SEC Action on Crypto Rules

Coinbase, one of the leading cryptocurrency exchanges, is pressing the Third Circuit Court to compel the U.S. Securities and Exchange Commission (SEC) to act on its long-pending rulemaking petition related to digital assets. The company has accused the SEC of bureaucratic delays and a lack of transparency, taking the legal showdown to a new level.

Highlights from Coinbase’s Court Filing

1. SEC’s Delay: Coinbase says the SEC has been slow to act on their request to clarify cryptocurrency rules.
2. Unsaid Denial: Coinbase believes the SEC has effectively rejected their request, even if it hasn’t said so.
3. Court’s Help: Coinbase is asking the Third Circuit Court to make the SEC respond within 30 days.

Coinbase has waited over a year for the SEC to clarify its stance on how existing securities laws apply to cryptocurrencies. After a recent “unilluminating update” from the SEC, Coinbase’s Chief Legal Officer, Paul Grewal, announced the company’s official response, filed with the Third Circuit Court on Twitter.

Despite court orders and ongoing legal procedures, the SEC has remained evasive about its plans to regulate the cryptocurrency market. This has only intensified Coinbase’s frustrations, leading to the current push for judicial intervention through a writ of mandamus. This legal order would require the SEC to act within a specified timeframe.

This case could have far-reaching implications for the cryptocurrency industry in the U.S. A favorable verdict for Coinbase could pave the way for clearer regulations, benefiting not just Coinbase but the industry. Conversely, a win for the SEC might give the agency more latitude to continue its existing and somewhat ambiguous approach.

The Coinbase vs. The SEC case has reached a critical stage, with the former urging the Third Circuit Court for swift and decisive action. The Third Circuit Court’s decision could either serve as a catalyst for regulatory clarity or maintain the status quo, leaving the industry uncertain.