The U.S. Securities and Exchange Commission (SEC) has refused to entertain Coinbase’s request for more clarity on crypto regulations.
On May 15, the SEC filed a brief in response to the Coinbase petition for a Writ of Mandamus. It made its stance very clear in that it was not prepared to abide by and provide any clarity on crypto regulations.
The Commission claimed that Coinbase does not and cannot demonstrate a clear and indisputable right to relief. Furthermore, the regulator asserts that it is not obligated to respond or to regulate crypto.
“Neither the securities laws nor the Administrative Procedure Act (“APA”) impose on the Securities and Exchange Commission an obligation to issue the broad new regulations regarding “digital assets” Coinbase has requested.”
SEC: New Regs Not Required
The regulator argued that new regulations are unnecessary because digital assets are securities.
“The rulemaking petition as to which Coinbase seeks an immediate determination asks the Commission to take a series of discretionary actions to replace existing applicable securities laws and regulations with a comprehensive new regulatory regime for the trading of crypto assets that are securities.”
The SEC also claims that various paths suggested by Coinbase are “complicated.” Additionally, the firm filed its rulemaking petition fewer than ten months ago. Furthermore, the regulator argued that the petition was fewer than three months ago.
Nothing happens fast with U.S. financial regulators, and this point was made by the SEC in conclusion.
“Coinbase’s preference for faster or different regulatory action by the Commission does not entitle it to extraordinary relief from this Court. The petition should be denied.”
In late April, Coinbase called for productive dialogue with the SEC. Following the SEC threat of action in late March, Coinbase Chief Legal Officer Paul Grewal said they were “disappointed that the SEC is considering courts over constructive dialogue.”
A month later, he said that Coinbase had repeatedly asked the SEC for guidance, but “To be candid … we’ve mostly got silence in response.”
Gary Gensler: Rules Are Already There
The response this week is a clear message that chairman Gary Gensler and his team are not interested in cooperating with crypto firms.
Gensler reaffirmed his stance at the Financial Markets Conference on May 15. “The rules have already been published,” he said in response to questions about the Coinbase spat.
On May 11, the U.S. Chamber of Commerce filed a brief criticizing the Commission in its case against Coinbase. “The SEC’s actions are not just harmful policy; they are unlawful; and the consequences of the SEC’s continued delay are severe for that reason too,” it stated.
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