SEC moves to block Coinbase’s request for clarification in court (report)

Late last month, Coinbase — which had previously been hit with a Wells notice, an informal warning from the SEC usually followed by a lawsuit — asked the courts to force the agency to explicitly state that it would remain compliant. What action should they take for that.

The SEC, on the other hand, remains tight-lipped.

amicable discussion preferred

According to Coinbase CEO Brian Armstrong – his firm intends to fight the current trend of regulation by enforcement and seeks to foster collaboration and amicable discussion regarding regulation.

“Spent the day in DC meeting with members of Congress. We need regulatory clarity in the US for centralized players in crypto for many reasons – consumer protection, national security, economic growth, etc. The SEC has done untold harm to the US with its policy of regulation by enforcement. We’ll fight to get it right.”

The executive further said that the company is prepared to defend itself in court but would prefer not to do so and reiterated that he and his exchange are open to good-faith talks with regulators.

The framework is already established, says Gensler

Despite Coinbase’s willingness to negotiate, SEC chief Gary Gensler stated in court that the existing regulation is already clear and crypto exchanges refuse to take it into account, According to Bloomberg.

In return, Coinbase requested a clear rule-making guideline to be submitted through a notice-and-comment process, which would allow the new clear rules to be publicly scrutinized.

Unfortunately for the exchange, the SEC moved to court to block the request, They said It could take years for that regulation to be set in stone.

“Coinbase’s preference for faster or different regulatory action by the Commission is not entitled to extraordinary relief from this court. The petition must be dismissed.”

Coinbase Chief Legal Officer Paul Grewal took to Twitter to reiterate his firm’s stance that the SEC does not provide clarity to the companies it regulates.

Today the SEC responded to Coinbase’s petition for a writ of mandamus – asking the court to simply answer yes or no to the SEC on whether it would be regulating our industry. SEC’s answer? A great one maybe. 1/7

— paulgrewal.eth (@iampaulgrewal) May 16, 2023

The securities regulator has said that Gensler’s public comments should not be taken as a policy statement — despite acknowledging that they may continue to use enforcement actions in lieu of a regulatory framework as long as they smooth the edges. Can’t do it

Meanwhile, Coinbase is sticking to their position stating that they do not list securities. According to a company spokesperson, the exchange already takes into account SEC guidelines regarding securities when deciding which tokens to list, which allows them to reject about 90% of applications.