By Tom Blitzer
Key Insights:
- Coinbase’s Chief Legal Officer expresses disappointment as SEC’s response offers little hope for clear cryptocurrency regulations.
- SEC’s ambiguous “maybe” response to Coinbase’s mandamus petition reveals their reluctance to expedite crypto rulemaking.
- Attorney Jeremy Hogan views the petition as evidence of the SEC’s aggressive stance on regulating cryptocurrencies.
The recent response from the U.S. Securities and Exchange Commission (SEC) to Coinbase’s writ of mandamus petition has been received by Coinbase’s Chief Legal Officer with less than optimistic expectations. The regulatory body’s stance offers little hope for the repeated appeals urging the establishment of comprehensive rules and transparent regulations for the cryptocurrency industry.
Coinbase had formally requested the SEC in July of the previous year, urging them to establish and implement specific regulations for crypto assets and their potential classification as securities. However, the securities regulator remained unresponsive despite waiting patiently for almost ten months. To push for progress on their application, Coinbase took the initiative and submitted a mandamus petition, legally obligating the SEC to provide a definitive response of either “yes” or “no” regarding the exchange’s original request.
Coinbase’s Legal Head Reveals SEC’s Ambiguity
Earlier today, Paul Grewal, the Chief Legal Officer of Coinbase, took to Twitter to disclose the SEC’s official reply. Regarding the regulator’s decision on the pending application for rulemaking, Grewal unveiled an intriguing response characterized by a resounding “maybe.” Nonetheless, he highlighted an unprecedented development as the SEC finally provided an exact position in court.
Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe. 1/7
— paulgrewal.eth (@iampaulgrewal) May 16, 2023
In Grewal’s analysis of the SEC’s stance, it is evident that crafting specific regulations for the cryptocurrency sector is a time-consuming endeavor, and the securities overseer is not keen on expediting the task. The SEC also clarified that instead of solely relying on rulemaking, they intend to pursue enforcement actions as an alternative approach. Nevertheless, the regulator emphasized that the insights gleaned from these actions will contribute to the ongoing rulemaking process.
SEC cautions crypto industry stakeholders
Stakeholders within the crypto industry have been cautioned by the Securities and Exchange Commission (SEC) against regarding Chairman Gary Gensler’s public remarks as official guidance or policy statements from the Commission. Grewal further emphasizes that Coinbase’s concerns regarding the lack of clarity within the industry are reinforced by the SEC’s response, specifically about what falls under or outside the Commission’s jurisdiction.
The Coinbase writ was never about getting an answer to whether the SEC will fairly regulate crypto.
That's obviously a "no."
This was a Coinbase offensive against the SEC lawsuit against it coming this summer. And it got some interesting tidbits to use. 1/2 https://t.co/aXwutfJXgh
— Jeremy Hogan (@attorneyjeremy1) May 16, 2023
Jeremy Hogan, an attorney specializing in cryptocurrency matters, offers a distinctive viewpoint on the recent advancements. Hogan’s perspective suggests that the intention behind the mandamus petition extends beyond merely obtaining a conclusive response from the SEC. Instead, its purpose lies in presenting compelling evidence of the regulatory body’s aggressive approach to governing cryptocurrencies.