Coinbase, which is among the largest cryptocurrency exchanges globally, has taken legal action against the US Securities and Exchange Commission (SEC) to seek clarification on the regulator’s stance on cryptocurrency regulation.
On April 24th, the exchange filed a petition requesting a federal judge to order the SEC to reveal its response to Coinbase’s petition from July 2022, which sought more precise regulatory guidelines.
For the past nine months, Coinbase has been anxiously awaiting a response from the Securities and Exchange Commission (SEC). The lack of a clear answer has generated a considerable amount of ambiguity across the cryptocurrency industry.
As a response to this predicament, a case has been filed asserting that the SEC’s silence is both unjustifiable and illegal. Additionally, the case argues that the uncertain conditions have resulted in harm to both Coinbase and its customers.
Delay by SEC on Guidelines
Coinbase’s recent decision comes in light of the SEC’s impending action against the exchange, which could potentially disrupt the investors’ ability to use the largest US crypto-trading platform.
The legal challenge from Coinbase is an effort to proactively address any potential SEC action and to compel the regulatory authority to provide transparent guidelines on its approach to regulating the cryptocurrency industry.
This move by Coinbase has garnered the support of over 1,700 entities and individuals who have submitted comments to support the petition for clarity. In the event that the SEC rejects the rulemaking petition, Coinbase reserves the option to challenge that decision in court.
SEC’s Stance Against Crypto
It seems that the Securities and Exchange Commission (SEC) has formed a definitive stance based on its actions against cryptocurrency this year. As, of this year, a number of crypto companies, including Coinbase, have been under investigation by federal regulators, particularly the SEC. In March, the SEC also sent a Wells Notice to Coinbase, indicating a potential enforcement action.
Recently, the company’s CEO, Brian Armstrong, even gave a slight hint about the option of relocating offshore after acquiring a license to operate in Bermuda.