Coinbase is filing a lawsuit against the SEC in the US, hoping the judge will force the SEC to respond to its July 2022 petition on extending securities rules to the crypto industry. The complaint comes as crypto exchanges face the SEC in the US.
Coinbase at war with SEC
While Gary Gensler is in the sights of an American congressman, it is the agency he heads that is in turmoil. Indeed, the cryptocurrency exchange Coinbase has filed a complaint against the SEC. According to the legal director of Coinbase, the complaint seeks to compel the SEC to respond to a petition on the regulation of the crypto industry.
As a reminder, on July 21, 2022, Coinbase had addressed a petition to the SEC, asking whether the rules applicable to securities could be extended to the crypto industry. To date, the U.S. financial watchdog has never provided a response to Coinbase’s petition, violating the Administrative Procedure Act, which requires the SEC to respond “within a reasonable time.” This regulatory uncertainty leaves the crypto industry in legal limbo. As a result, crypto industry players are unaware of the law applicable to their activities.
The rulemaking process is a critical step in informing the public of what activities they can and cannot engage in. So until the crypto industry gets that clarity, we will continue to take every step available to us to seek it, which includes today’s complaint.Paul Grewal, Coinbase’s general counsel
Coinbase is not the only actor to fight the SEC. Warren Davidson, member of the American Congress recently called for the removal of Gary Gensler and a profound restructuring of the SEC which he chairs. Warren accuses the president of the SEC abuse of discretion and failure to protect investors.
Coinbase ready to take on SEC to defend exchanges in US
For the past few months, crypto exchanges have been under heavy fire in the United States. Beaxy and Bittrex were forced to withdraw from the American market. Just like their competitors Binance or Kucoin which must also face justice. On his side, Kraken was forced to close its service staking service after receiving a heavy fine.
Faced with this regulatory uncertainty, Paul Grewal, legal director of Coinbase believes that the SEC denied the petition. It invites the SEC to make its position known publicly. If the decision of the SEC Is not in favor of regulating the crypto industry, Coinbase will file a new complaint to ask if this decision is appropriate.
The legal front marks a change in approach in Coinbase’s fight for proper crypto regulation. A few days ago, Coinbase was not ruling out the idea of leaving the United States if regulatory uncertainty persists. The platform now seems determined to take on the regulators, chief among them the SEC. We can only support Coinbase in this fight.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.