A Coinbase executive warns that the U.S. Securities and Exchange Commission (SEC) may regularly change its stance on digital assets before any new crypto regulations may be drafted.
Paul Grewal, chief legal officer at top US exchange Coinbase, tells are 37,100 Twitter followers that a new SEC court finds that regulatory clarity for the crypto industry may not have existed for quite some time.
Coinbase filed a motion in April to force the SEC to respond to an earlier petition from the company asking for regulatory guidance for the digital asset industry. The SEC filed its response on May 15.
Says Grewal in response to the SEC’s filing,
“Today, the SEC responded to Coinbase’s petition for a subpoena of mandamus – asking the court to require the SEC to answer only yes or no to whether it will regulate our industry. The SEC’s answer? A resounding maybe.”
According to Grewal, the SEC can take it year to establish clear rules for the crypto industry.
“The SEC told the court that making rules could take years and they are in no rush.”
He too warns that before new regulations are made, the main US securities regulator will continue to take enforcement action against players in the crypto industry and its positions on digital assets probably will shift after a while.
“The SEC acknowledged that it will continue to use enforcement actions as a substitute for regulation for the foreseeable future, but don’t worry — those enforcement actions may eventually ‘inform’ unplanned regulation.
The SEC also said that public statements from [SEC] Chair [Gary] Gensler are not formal guidelines or policy statements from the SEC and the public cannot rely on them as such.
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 it’s likely to continue to change its mind along the way.
According to Grewal, Coinbase plans to file a response to the SEC filing next week.
In March, the SEC sent a Wells notice to Coinbase after making a “preliminary decision” to recommend enforcement action against the crypto exchange for allegedly violating securities laws.
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