Coinbase files action against SEC seeking clarity on crypto regulations

Coinbase filed legal action on April 24 to compel the U.S. Securities and Exchange Commission (SEC) to respond to its earlier rulemaking request.

Coinbase asks for an answer

In July 2022, Coinbase produced a petition that asked the SEC to use its rulemaking process to develop guidance for companies in the crypto industry.

The current filing does not compel the SEC to comply with the petition. Rather, if the filing is successful, it will compel the SEC to accept or reject the petition.

Coinbase said that the SEC is required to respond to petitions within a reasonable amount of time. It suggested that the SEC has likely decided to reject its request but said that the regulator had not made any public statement on the issue.

The current filing is indirectly related to a Wells notice that Coinbase received from the SEC in March. That notice is a sign that the SEC could soon file charges against Coinbase, and Coinbase plans to fight the SEC in court if it decides to advance.

According to Coinbase, the SEC must make a statement on the matter in order for members of the public (or Coinbase itself) to challenge certain SEC policies. As such, Coinbase needs the SEC to answer its petition, even if the answer is “no.”

Coinbase met with SEC, Congress

Coinbase CEO Brian Armstrong separately tweeted that he and his staff met with the SEC. he said that Coinbase will “continue pushing for a clear rule book.”

Armstrong and his staff also met with Members of Congress prior to that appointment in order to discuss related regulatory issues, including SEC overreach.

Coinbase is one of many crypto firms that have recently been targeted by the SEC; others include Kraken, Bittrex, and Ripple. Last week, House Republicans criticized SEC chair Gary Gensler for his agency’s harsh treatment of the cryptocurrency industry.

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