Coinbase has asked the SEC for clarity on formulation of rules for the crypto sector, for the second time since July 2022.
Coinbase says 1,700 entities have commented on its petition over the last nine months
Photo Credit: Unsplash/ PiggyBank
Coinbase, one of the world's largest crypto exchanges, has sued the US Securities and Exchange Commission (SEC) to clarify rules surrounding the growth of crypto businesses in the US. The crypto exchange has asked a US court to compel the SEC to provide detailed information to allow crypto companies to plan and develop their operations. This move comes months after Coinbase asked the SEC for clarity on crypto rules after the regulator opened investigations into the business activities of the crypto exchange.
In July 2022, Coinbase in July 2022 filed a petition asking the SEC if it would use its official rulemaking process to provide guidance to crypto players. This legal action is a follow-up to Coinbase's petition to the US SEC seeking clarity.
“Coinbase filed a narrow action in federal court to compel the SEC to respond yes or no to our July 2022 petition asking the SEC to use its formal rulemaking process to provide guidance for the crypto industry. The Administrative Procedure Act (the APA) requires the SEC to respond to Coinbase's rulemaking petition ‘within a reasonable time',” Coinbase wrote in a blog post.
The exchange says that over the last nine months, over 1,700 entities have submitted comments to Coinbase's petition. If the SEC responds with a no to Coinbase's petition, then the crypto exchange would have an option to challenge that decision in court and pitch the need for clear crypto guidelines in the US.
“It's important for the SEC and any other agency petitioned for rulemaking to respond to the petition once the agency has made up its mind, especially if the answer is no – otherwise the public can never exercise its right to ask a court if the agency's decision was proper. From the SEC's public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition. But they haven't told the public yet. So, the action Coinbase filed today simply asks the court to ask the SEC to share its decision,” the blog added.
In March this year, the SEC threatened to sue Coinbase Global over some of the crypto exchange's spot market as well as its Earn, Prime and Wallet products. Coinbase's step to get the SEC to make its decision on its petition is being seen as a reaction to the SEC's threat to probe the crypto firm.
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