Coinbase Breaking Silence Again, Gets Mandamus Against SEC

Coinbase made a move against the US SEC seeking clarity on crypto regulations petition. The recent action—a legal petition to the financial regulator, again. The leading crypto exchange firm filed a writ of mandamus after the agency’s response. Chief legal officer, Paul Grewal, informed about the company’s reply to the regulator’s arguments. 

In a tweet on Tuesday, May 23, Grewal noted that Coinbase responded to the Securities and Exchange Commission. The retort in the Third Circuit came in the wake of the latter’s arguments against their writ of mandamus petition. 

“Mandamus is the tailor-made remedy for the extraordinary facts presented here. We continue to appreciate the Court’s consideration,” he added. 

The tussle started in July last year with the leading US crypto exchange filing a petition to the SEC, asking for better clarity on crypto regulations. However, the regulator didn’t acknowledge the request. 

TheCoinRepublic reported earlier that Coinbase went on to take legal actions against the US regulator. In the filing, the company urged the court to interfere to push for a response to the petition. 

The SEC has taken action against Bittrex and Gemini, two cryptocurrency exchanges, as well as Genesis, a cryptocurrency lender, and a number of other parties since January, including Justin Sun, a cryptocurrency entrepreneur, and Do Kwon, the disgraced founder of Terraform Labs.

“Based on the SEC’s public remarks and enforcement actions in the cryptocurrency market, it appears that the SEC has already decided to reject our petition. The public hasn’t yet been informed, though. Therefore, the lawsuit Coinbase filed today just requests, according to Coinbase Chief Legal Officer Paul Grewal’s blog post, that the court ask the SEC to disclose its conclusion.

A little over a month after receiving a Wells notice from the SEC warning it of impending legal action, this is Coinbase’s first official shot at the regulator.When the petition was not answered by April, Coinbase formalized its request for the government to react by filing a writ of mandamus in the U.S. Court of Appeals for the Third Circuit. 

The petition’s call to action could be rejected by the SEC as a response under the mandamus. The possibility of more legal action to compel rulemaking on digital assets would arise if this were to happen.

Initially, neither did the SEC react to the mandamus. The SEC responded on May 15 with a brief requesting the court to reject the petition after a court order mandated it. It asserted that Coinbase’s request was unreasonable and that the regulation process might take years.

However, at a speech the following day, SEC Chair Gary Gensler responded to a question from the audience by stating that, in reference to current securities laws, “the rules have already been published” for the cryptocurrency market.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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