SEC Response to Court Order “Borderline Disrespectful”: Analyst

• A lawyer on Twitter sharply criticized the SEC’s response to the Third Circuit.
• The lawyer asserted that the filing was disrespectful as it didn’t provide an answer to the Court’s questions.
• Coinbase CLO Paul Grewal alleged that the regulators had no intent to create new crypto rules.

James Murphy, a vocal lawyer known on Twitter as MetaLawMan, recently commented on the Securities and Exchange Commission’s (SEC) response to last week’s Third Circuit. According to Murphy, the SEC’s response was “borderline disrespectful to the Court” as the commission re-argued on the denial of the issuance of the mandamus petition.

In April of this year, Coinbase filed a narrow action for a writ of mandamus, asking the SEC to respond to its longstanding petition for regulatory clarity.The SEC did not respond, and subsequently sued Coinbase on June 6 for allegedly violating security laws. The same day, the Third Circuit Court ordered the regulatory body to provide a clear explanation within seven days whether this action meant its answer to Coinbase’s petition was a “no”.

In the early hours of June 14, MetaLawMan posted on Twitter his response to the SEC’s filing in response to the order, which did not answer the Court’s questions.

MetaLawMan’s tweet was a response to a post by Coinbase’s Chief Legal Officer Paul Grewal, who shared his analysis of the SEC’s response to the Court order.

Posting screenshots of the SEC’s filing, Grewal posited that the response was futile as it hadn’t produced any decisions on clearer crypto rules. Also, despite the court order, the SEC anticipated “making a recommendation in 120 days”.

Grewal also pointed out that the regulators had no intention to issue rules, instead “conflate the evidence of a decision those statements provide with an argument that the statements are themselves a decision”. The first statement in the SEC’s responses to the Court’s questions was simply “The Commission has not decided what action to take on Coinbase’s rulemaking petition”.

MetaLawMan was sharply critical of the regulator, arguing that the “SEC might be overestimating the 3^rd Circuit’s sense of humor about getting jerked around”.