Coinbase, the popular cryptocurrency exchange, has filed a petition to compel the U.S. Securities and Exchange Commission (SEC) to respond to a petition filed in July 2022. The petition asked whether the SEC would allow the industry to be regulated using existing frameworks. The SEC has not responded to the petition, prompting Coinbase to escalate tensions with the regulator.
In a blog post, Coinbase’s chief legal officer, Paul Grewal, wrote that over 1,700 entities and individuals have submitted comments to the petition, echoing the request for clarity. Grewal added that from the SEC’s public statements and enforcement activities in the crypto industry, it appears that the regulator has already made up its mind to deny Coinbase’s petition, but it hasn’t told the public yet.
Coinbase has filed the petition in the U.S. Court of Appeals for the Third Circuit on Monday. The move is the latest pushback the SEC has received in recent months as the regulator pushes actions against crypto firms Bittrex, Gemini, Genesis, as well as entrepreneurs including Justin Sun and Do Kwon.
Last month, the SEC threatened to sue Coinbase over some of its products. Coinbase is considered the gold standard among crypto exchanges for compliance with laws, but the American firm has suffered over the years due to legal uncertainties, preventing it from developing and rolling out new products, even as its rivals scaled in international markets.
Brian Armstrong, co-founder, and CEO of Coinbase, has said the exchange may consider moving its headquarters outside the U.S. unless the country changes its approach to regulation. “Anything is on the table, including relocating or whatever is necessary,” he said last week.
In his blog post, Grewal wrote, “Coinbase does not take any litigation lightly, especially when it relates to one of our regulators. Regulatory clarity is overdue for our industry. Yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, even though we have not been told how the SEC believes the law applies to our business.”
