The U.S. Court of Appeals for the Third Circuit has ordered the U.S. Securities and Exchange Commission (SEC) to clarify its position on a rulemaking application from cryptocurrency exchange Coinbase (COIN).
Coinbase in April forced the SEC’s hand on a 2022 petition for formal rulemaking in the digital asset space, urging courts to comply with regulators, saying existing requirements were inappropriate for digital assets. filed an Administrative Procedure Act challenge.
The SEC is now under seven days to explain whether it intends to deny Coinbase’s request, the reasons for its decision, or the timeline by which the decision is expected to be made.
“Traffic rules, by law and/or rulemaking, must be enacted before any enforcement action. Coinbase Chief Legal Officer Paul Grewal said. said in a tweet thread.
This is all due to the SEC suing Coinbase for allegedly operating an unregistered stock exchange.
“We believe that without the SEC’s decision to dismiss our petition for rulemaking, the SEC could not have pursued a lawsuit against our industry like the lawsuit filed against us today. We continue to believe,” Grewal tweeted.
The SEC also needs to explain why the court should not continue to oversee this case, and why the SEC should not provide Coinbase with regular updates on rulemaking upon request.
“If the SEC’s answer to our petition for rulemaking is ‘no’, we have the legal right to ask that ‘no’ in court, so the SEC can tell us that. required by law. And it raises serious questions,” Grewal concluded.
