Coinbase: Court Should Force SEC To Respond To Coinbase Complaint

Key Points:

• Coinbase’s chief legal officer argued that the Court should force the SEC to respond to the company’s lawsuit.
• The crypto exchange claims that the SEC must decide within 60 days to avoid unnecessary delays.
• The action of the SEC is said to be aggressive to harm the crypto industry.

On June 17, Paul Grewal, Coinbase’s chief legal officer, tweeted that the company cannot wait until next week’s deadline for the US SEC to respond to the Third Circuit Court’s order on June 6.

According to the filing, Paul Grewal said the Commission could not sue the company that listed the tokens as allegedly unregistered securities because the Commission did not issue specific rules when the agency did not regulate with Coinbase’s call last summer.

The largest cryptocurrency exchange in the United States also argued that the SEC deliberately dodged the Court’s question about the regulation deadline and instead “anticipated” staff “recommendation”.

It is unusual for the government to refuse a direct investigation in federal Court. Now, the Court should issue an executive order because the SEC has decided not to grant Coinbase’s rule-making petition and is actively harming the industry.

The SEC’s refusal to say how long it would take to comply with Coinbase’s request confirms the futility of further delays. The Court should require the SEC to report its actions within 60 days, and if the SEC has yet to act after that, the Court should promptly rule on the enforcement order.

In a new development, the current judge in the SEC case has been replaced less than 10 days into the time it took for plaintiffs to file charges.

The regulator launched a series of lawsuits involving the world’s top crypto exchanges, targeting Coinbase and Binance. Coinbase, a leading US-based exchange, was accused of offering unregistered securities through a staking program as a service.

Meanwhile, the crypto market showed little adverse reaction to the subsequent lawsuits, amid a prolonged decline in asset prices following news of the US regional banking crisis.

Judge Katherine Polk Failla has replaced Judge Jennifer Rearden in the SEC Coinbase case, who previously oversaw another crypto lawsuit, involving Tether and Bitfinex. However, there seems to be no particular reason why the judge was replaced. Past experience is said to be the case in favor of the new judge as she will be familiar with crypto terminology.

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