Coinbase, one of the leading cryptocurrency exchanges, has strongly responded to the U.S. Securities and Exchange Commission (SEC) in its ongoing legal battle. In a recent filing to the Third Circuit of the U.S. Court of Appeals, Coinbase asserted that its petition for a response regarding new digital asset regulations was still justified.
Accusing the SEC of contradictory statements and misguided actions, Coinbase stated in the 23-page filing, “The SEC is talking out of both sides of its mouth, and it is wrong at each end.”
Last month, the company initiated the lawsuit, utilizing a writ of mandamus, which seeks court intervention against federal officials in extraordinary circumstances. This legal action specifically demands a definite response from the SEC regarding a previous request for new rules about digital assets.
At the core of this dispute lies the longstanding debate over classifying digital assets as securities, subjecting them to SEC trading regulations. Earlier this month, the regulator informed the court that Coinbase’s recent legal action was “baseless” and required more time to consider the original request.
Reiterating its stance, Coinbase contended that the SEC had already decided to reject its request for new rules, citing public statements made by SEC Chair Gary Gensler.
“The SEC’s and its Chair’s words and actions leave no doubt of the agency’s plans,” Coinbase stated in the filing. “The SEC has no intention of engaging in such rulemaking in the foreseeable future, and that decision may be unreviewable indefinitely unless the Court grants Coinbase’s mandamus petition.”
Furthermore, Coinbase argued that the SEC’s enforcement actions further indicated its lack of consideration for the petition while accusing the regulator of disregarding other petitions from the cryptocurrency industry for an extended period.
Coinbase emphasized, “The SEC’s threatened enforcement action against Coinbase dispels any doubt,” referring to a recent Wells notice received by the company, which signifies an impending investigation. “These actions presuppose that the agency believes the securities laws are clear and workable as applied to digital assets and that additional rulemaking is unnecessary.”
The ongoing legal battle between Coinbase and the SEC highlights the increasing tensions and uncertainties surrounding digital asset regulations. The outcome of this case could have significant implications for the cryptocurrency industry, potentially shaping the future regulatory landscape for digital assets within the United States.
