SEC Refuses to Respond to Coinbase’s Rulemaking Petition Following Lawsuit

The U.S. Securities and Exchange Commission today said it had not decided on whether to clarify new crypto rules after America’s biggest crypto exchange Coinbase made a special request for the top regulator to do so. 

In a Tuesday filing, the Wall Street regulator said it “has not decided what action to take on Coinbase’s rulemaking petition.”

It comes after the U.S. Court of Appeals for the Third Circuit’s judge Cheryl Ann Krause—who noted the SEC’s lawsuit filed last week—ordered the SEC to reveal whether it has decided to deny Coinbase’s petition. That petition, filed last year, asked the SEC to clarify its rules on which assets should be regarded as securities and how to regulate digitally native securities.

The SEC last week hit America’s biggest crypto exchange with a lawsuit, alleging that it operated for years as an unlicensed securities exchange and “elevated its interest in increasing its profits over investors’ interests.”

Coinbase’s Chief Legal Officer Paul Grewal said on Twitter that the SEC “repeat the fallacy that they haven’t made any decision on new crypto rules,” adding that “they refuse to commit to any deadline despite the Court’s explicit order.”

The SEC’s Coinbase lawsuit is part of a broader crackdown on the industry, pushed by Chairman Gary Gensler, who has repeatedly said that all digital coins and tokens—except for Bitcoin—are securities. 

A day before suing Coinbase, the SEC had hit Binance, its American sister exchange Binance US, and its boss Changpeng Zhao, with 13 civil charges. 

In its crypto crackdown this year, the SEC also targeted American digital asset exchanges like Kraken and Gemini for allegedly selling unregistered securities. 

Gensler, who became the SEC boss in 2021, even hinted last week the cryptocurrency industry wasn’t welcome in the States. “We don’t need more digital currency,” he said, adding that the digital asset world was “built on non-compliance.”

Coinbase’s stock, which trades under the ticker COIN, was today priced at $52.40—up 3.6% in 24 hours.