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Top crypto exchange Coinbase has addressed the SEC's response provided earlier in the week, citing that further delay is futile.
Coinbase's Chief Legal Officer Paul Grewal has shared the company's response in a new tweet.
Outstanding job 👏 Coinbase writes a persuasive and compelling response. https://t.co/67Ttp96Fel
— John E Deaton (@JohnEDeaton1) June 17, 2023
Grewal stated that the crypto exchange could not wait until its deadline in the upcoming week to answer the SEC, as it seems unusual for an agency to defy a direct question from a federal court. He added that the SEC's evasive response goes further, and thus it sets out its response.
According to the letter it submitted, Coinbase highlighted that the court's June 6 order summarized the agency's rejection of its rulemaking petition.
Coinbase argues that the smoking gun evidence is the SEC's now-filed enforcement action against Coinbase itself, demanding compliance with nonexistent rules it had urged the commission to write last summer.
On June 6, the court posed a question to the SEC in light of its enforcement action against the crypto exchange, asking whether this means the agency has decided to deny its pending petition for rulemaking.
The SEC responded to the court order this week, on June 13 precisely, saying that it had not reached a decision one way or the other but that agency staff expects to make a recommendation within 120 days.
CryptoLaw founder John Deaton praises Coinbase's response to the SEC, describing it as "persuasive and compelling."
SEC actively harming crypto industry
In its response, Coinbase requests that the court grant its mandamus petition without delay. Coinbase adds that if the court is inclined to defer action as the commission proposes, then it requires a progress report within no more than 60 days.
In doing so, the court should order the SEC to report the status of its action on the Coinbase petition, not the status of its staff's recommendation, it added.
Coinbase recommends that if the agency still has not decided on its petition at the time, then the court should promptly rule on its submitted mandamus petition.
Highlighting a key reason why the court should grant its mandamus now, Coinbase argues that the commission has decided not to grant its rulemaking petition and is actively harming the industry.
Coinbase's rulemaking petition had asked the commission to provide urgently needed and long overdue rulemaking concerning the securities laws' application to digital assets, contending that the existing rules provide neither a feasible registration process nor fair notice of how the SEC assesses whether a digital asset is a security.
Godfrey Benjamin
Dan Burgin
