In response to Coinbase’s petition for a Writ of Mandamus, the U.S. Securities and Exchange Commission (SEC) has made its stance clear, refusing to provide any further clarity on cryptocurrency regulations. The Commission argues that Coinbase lacks a clear and indisputable right to relief and asserts that it is not obliged to respond or regulate crypto.
According to the SEC, neither the securities laws nor the Administrative Procedure Act (APA) imposes an obligation on them to issue the broad new regulations that Coinbase has requested for “digital assets.” The regulator contends that digital assets are already considered securities, rendering new regulations unnecessary.
Coinbase’s request for immediate determination seeks discretionary actions from the Commission to replace existing securities laws and regulations with a comprehensive new regulatory regime for the trading of crypto assets that are securities. The SEC dismisses the suggested paths put forth by Coinbase as “complicated” and highlights that Coinbase filed its rulemaking petition less than ten months ago.
The SEC concludes that extraordinary relief from the court is not warranted simply because Coinbase prefers faster or different regulatory action. They emphasize that the petition should be denied, emphasizing the slow pace at which U.S. financial regulators operate.
Coinbase had previously desired productive dialogue with the SEC in late April. However, following the SEC’s threat of action in late March, Coinbase’s Chief Legal Officer, Paul Grewal, expressed disappointment in the SEC’s inclination towards litigation rather than constructive dialogue. He mentioned that Coinbase had repeatedly sought guidance from the SEC but received mostly silence in response.
The SEC’s recent response underscores Chairman Gary Gensler’s lack of interest in cooperating with crypto firms. Gensler reaffirmed his stance at the Financial Markets Conference on May 15, stating that the rules governing crypto have already been published, indicating the Commission’s reluctance to engage in further discussions.
Adding to the dissenting voices, the U.S. Chamber of Commerce filed a brief on May 11, criticizing the Commission in its case against Coinbase. The brief contends that the SEC’s actions not only constitute harmful policy but are also unlawful. It emphasizes the severe consequences resulting from the SEC’s continued delay in providing clarity.
In light of the SEC’s firm stance and lack of willingness to engage in constructive dialogue, the future of regulatory clarity for cryptocurrencies remains uncertain. Coinbase and other crypto firms must navigate this evolving landscape cautiously, considering the potential implications of regulatory inaction.
