Cryptocurrency exchange Coinbase has taken further action in its ongoing efforts to obtain a writ of mandamus from the United States Securities and Exchange Commission (SEC) regarding its rulemaking petition. Coinbase’s Chief Legal Officer, Paul Grewal, has referred to the mandamus as the appropriate solution for the exceptional circumstances.
In July, Coinbase submitted a petition to the SEC, urging the commission to propose and implement regulations governing the trading and offering of securities through digital means. The petition included 50 questions for the SEC to consider in the rulemaking process.
According to Coinbase’s recent filing on May 22, the agency has made a decision to reject the July petition but has not made this decision public. Additionally, Coinbase claims that the SEC’s lack of action is part of a larger pattern, stating that the agency has received five rulemaking petitions related to digital assets since 2017 but has taken no action on any of them.
Coinbase and the SEC have presented arguments regarding the appropriate response time for rulemaking, even when a mandamus writ is involved. Coinbase argues that its case is distinct from others, as it involves the agency actively pursuing enforcement on the same topics addressed in the rulemaking petition and potentially threatening legal action against Coinbase itself.
In April, when Coinbase did not receive a response to its petition, it filed a writ of mandamus in the U.S. Court of Appeals for the Third Circuit, seeking a formal requirement for the SEC to respond. The SEC could reject the petition’s call to action in response to the mandamus, but doing so would expose it to further legal action compelling rulemaking on digital assets.
Following the court’s ruling, the SEC finally responded on May 15, opposing the petition and requesting the court to deny it. The SEC argued that Coinbase’s request was unreasonable and that the rulemaking process could take years.
Despite the SEC’s response, Coinbase highlights a speech by SEC Chair Gary Gensler on the same day, where he stated that the rules for the crypto market have already been published, referring to existing securities legislation.
Coinbase suggests that the SEC be required to respond to its July petition within seven days or provide an explanation for the delay and set a deadline.
In March, Coinbase received a Wells notice, indicating potential legal action from the SEC for possible violations of securities laws.
