Coinbase argued that the current regulations are not appropriate for digital assets.
Within the next week, the SEC must explain its stance on Coinbase’s petition.
The U.S. Securities and Exchange Commission (SEC) has been called for by the Third Circuit Court of Appeals to provide more explanation of its stance on a rulemaking petition submitted by Coinbase (COIN), a cryptocurrency exchange.
Coinbase argued that the current regulations are not appropriate for digital assets, therefore in April, it filed a challenge under the Administrative Procedure Act to compel the SEC to reply to its petition for formal rulemaking in the digital assets sector filed in 2022.
7 Days Time for SEC
Within the next week, the SEC must explain whether it will deny Coinbase’s application, the basis for its denial, and when it expects to make a final judgment.
Paul Grewal, Coinbase’s Chief Legal Officer stated:
“Rules of the road, from legislation or rulemaking or both, must come before enforcement actions. That is why we petitioned the SEC for rulemaking nearly a year ago in the first place.”
The SEC is suing Coinbase because it is allegedly running an unlicensed securities exchange. The regulator must also submit an explanation as to why the court shouldn’t continue to monitor the case and why the SEC won’t provide Coinbase with periodic updates on regulation as requested.
Grewal further stated:
“We continue to believe that the SEC could not be proceeding with litigation against our industry, like the case filed against us today, if the SEC had not already decided to deny our petition for rulemaking.”
On the other hand, Cathie Wood’s Ark Invest boosted their position in Coinbase Global Inc. on June 6, after the company’s shares dropped to over five-month lows due to the Securities and Exchange Commission’s assault on the crypto industry.