The U.S. Securities and Exchange Commission (SEC) has formally responded to the Third Circuit's request related to the ongoing dispute with Coinbase. The SEC's lengthy response reveals a continued reluctance to clarify its stance on cryptocurrency regulation or commit to any definitive timeline for rulemaking, despite the court's explicit orders.
The SEC refutes Coinbase's demand for immediate action, labeling it an "extraordinary request." The commission argues that due to the vast scope of Coinbase's rulemaking petition, which was filed just months ago and supplemented more recently, it has not yet determined an appropriate course of action. This, according to the SEC, is an entirely reasonable stance considering the circumstances.
Most significantly, the SEC is ignoring its chair's explicit statements indicating a lack of intention to issue new rules. Instead, it conflates these utterances as evidence of a decision while denying that these statements constitute a decision in themselves.
In a somewhat unexpected development, the SEC has given an estimated timeline for further action. The counsel for the commission states that they anticipate being able to make a recommendation regarding Coinbase's rulemaking petition within the next 120 days. They have offered to provide the court with a status report by Oct. 11, 2023.
Coinbase's petition has put pressure on the SEC to take a definitive stance on cryptocurrency regulation, which has been a point of contention between regulators, cryptocurrency companies and investors. It remains to be seen how the court will respond to the SEC's recent assertions and its proposed timeline for action.
While this response does provide some clarity on the SEC's current stance, it further underscores the complex regulatory environment surrounding cryptocurrency. With the SEC's cautious and meticulous approach, the crypto industry must continue to operate in a climate of legal uncertainty.