According to Coinbase’s Chief Legal Officer Paul Grewal, the U.S. Third Circuit Court has given the U.S. Securities and Exchange Commission (SEC) 10 days to respond to Coinbase’s mandamus petition.
The court ordered an SEC response in a text-only directive, after which Coinbase has seven days to respond.
Coinbase Filing Marks Almost 10 Months Since Initial Request
On April 24, the exchange filed a “narrow action” asking the SEC to respond to its petition. The agency has reportedly ignored Coinbase’s July 2022 petition asking whether the SEC would create new rules for crypto.
Over 1,700 entities have commented on the petition’s plea for legal clarity.
Paul Grewal argued at the time the need for clear laws tailored to new technology.
“Enforcement actions based in inapplicable securities law aren’t the answer.”
In an interview with the Bankless podcast, Grewal said that the SEC had not made any rules for crypto, revealed by the lack of requests for comment. SEC Chair Gary Gensler sets the rulemaking agenda at the start of every year.
Earlier this year, the SEC issued Coinbase with a Wells Notice arguing it lists unregistered securities. The exchange recently obtained a license from the Bermuda Monetary Authority.
This approval prompted speculation that the SEC’s aggression would cause Coinbase to take its business elsewhere.
Coinbase rival Kraken shut down its institutional staking service for U.S. customers after an SEC enforcement action. After the Kraken saga, SEC Commissioner Hester Peirce criticized the agency’s lack of standard registration procedures.
O’Leary Says Coinbase Made the Wrong Move
Social media response to Grewal’s tweet was largely negative, with most respondents saying that courts will aid and abet delays to accommodate the SEC.
Pseudonymous trader Cryptonym, who has 3,162 followers, said that the SEC would request an extension, followed by Coinbase asking for an extension to respond.
Data analyst Paul Wong argued that the SEC might respond timeously given their bad track record in meeting deadlines in the SEC vs. Ripple case.
Bitcoin investor Kevin O’Leary argued that Coinbase’s court filing would not advance U.S. crypto legislation.
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