The U.S. Securities Exchange Commission (SEC) has provided an official response in court regarding Coinbase’s plea for clear cryptocurrency regulation. The SEC stated that rulemaking in this area could take years, implying a prolonged wait for definitive guidelines, while emphasizing that enforcement actions will persist in the interim.
Court documents filed on May 15 reveal that the SEC contends it is not obligated to meet Coinbase’s outlined requirements, asserting that the firm has unreasonably demanded a complex set of reforms and expedited rulemaking.
Requesting the court to deny Coinbase’s petition for mandamus, the securities regulator argues that mandamus is an “extraordinary remedy” and maintains that Coinbase lacks the demonstrated right to relief.
Coinbase’s chief legal officer, Paul Grewal, took to Twitter to comment on the filing, noting that this might be the first instance where the SEC has articulated its stance on whether the agency should establish regulations for the crypto industry. Grewal also highlighted the need for further clarification, emphasizing that many issues remain unresolved.
“The SEC told the court that rulemaking may take years and they’re in no rush,” he stated. “The SEC acknowledged that it will continue to use enforcement actions as a substitute for rulemaking for the foreseeable future, but not to worry—those enforcement actions may eventually ‘inform’ not-yet-planned rulemaking.”
Interestingly, only hours before the filing, SEC chief Gary Gensler gave a keynote speech asserting that crypto regulations had already been published and were adequate.
Notably, the SEC distanced itself from any public comments and views expressed by its chair, which appears to pertain more to Gensler’s classification of most cryptocurrencies as securities.
“The SEC also said that the public statements by Chair Gensler are not formal guidance or policy statements from the SEC and the public cannot rely on them as such,” Grewal emphasized.
Ultimately, the regulator argues against being compelled to undertake rulemaking for the crypto industry. “Neither the securities laws nor the Administrative Procedure Act imposes on the Securities and Exchange Commission an obligation to issue the broad new regulations regarding ‘digital assets’ Coinbase has requested,” the SEC asserted. It further stated that Coinbase has not persuasively demonstrated any harm caused by the SEC’s delay in acting on the petition.
Furthermore, the SEC maintains that its recent enforcement actions in the crypto sector do not indicate a decision against engaging in rulemaking.”The Commission continues to consider Coinbase’s petition in the ordinary course,” the agency clarified.
Grewal argues that the SEC’s response reinforces Coinbase’s longstanding concern regarding the lack of clarity on the SEC’s jurisdiction in the industry. He contends that the agency’s shifting perspectives along the way exacerbate the problem.