The Securities and Exchange Commission (SEC) has responded to Coinbase’s complaint. The largest US crypto exchange had filed a lawsuit against the SEC on April 25, demanding clarity on crypto regulation. The company filed a petition for a subpoena from mandamus, which requires the SEC to respond within a reasonable time.
In the filing, Coinbase asks the SEC to formally clarify “which digital assets should be registered as securities.” In addition, the court should require the SEC to answer only “yes or no” when asked if it is going to impose regulations on the crypto industry.
SEC Responds to Coinbase Complaint
Late Monday night (EST), the US regulator released its response, and the response is once again more than disillusioning for the crypto community. Paul Grewal, Chief Legal Officer (CLO) of Coinbase wrote via Twitter that the SEC’s response is “an overwhelming maybe.”
According to him, today’s filing marks the first time the SEC has formally expressed its opinion on whether and how the SEC will regulate the crypto industry in court. The SEC told the court that making crypto regulations could take years and that it is “in no hurry”.
In addition, the SEC acknowledged that it will continue to use enforcement action as a substitute for regulation for the foreseeable future. In this regard, Grewal ironically states, “but don’t worry – those enforcement actions may eventually give ‘information’ to yet unplanned regulations.”
The SEC also claims that Coinbase has no right to give the regulator mandamus to perform certain tasks:
Perhaps acknowledging, Coinbase is instead claiming that this Court should compel the Commission to follow up on Coinbase’s recently filed regulatory petition. But no statute or regulation requires the Commission to take such action under a specific timetable.
Further, in its response letter to the court, the SEC writes that Chairman Gensler’s public statements are not formal SEC guidelines or policy statements and as such the public cannot rely on them. Grewal’s conclusion is therefore damning:
Overall, the SEC’s response reinforces Coinbase’s long-standing concern that our industry lacks clarity on what the SEC considers to be in or out of its jurisdiction at any given time, and that it will likely continue to change its mind along the way.
However, Grewal also announced in a tweet that Coinbase will take the opportunity to formally respond to the SEC’s letter next week. It remains to be seen what the next steps are for Coinbase and whether writing mandamus can bring anything beneficial to the crypto industry.
The entire crypto market is currently at a pivotal moment in terms of price. The total market cap stands at $1.098 trillion, just above the $1.081 trillion support line. During the last sell-off, the 200-day EMA acted as crucial support.
Featured image from Wccftech, chart from TradingView.com