Court Orders SEC To Respond To Coinbase Allegations Within 10 days• May 4, 2023 3:56 pm • Comments
Previously, Coinbase had taken legal action against the SEC and requested the court to force the SEC to respond to its complaint about how it applies securities laws to digital assets.
For a long time, Coinbase had been requesting this information, but the SEC had never responded which meant the industry never got clear regulatory guidelines.
It looks like the court is finally taking action and has ordered the SEC to respond to Coinbase within 10 days.
This will hopefully accelerate the creation of a crypto regulatory framework that can bring confidence back to crypto investors within the US.
Whether or not the SEC will actually provide a satisfactory answer is still to be determined as the SEC has always avoided such questions.
THIS IS BIG!
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) May 4, 2023
Coinbase last week argued that the SEC is providing insufficient regulatory guidance for U.S. companies operating in the crypto sector, saying the commission must “at a minimum must set forth how those inapt and inapposite requirements are to be adapted to digital assets.”
The crypto exchange referred to a 2022 petition asking for formal rulemaking within the digital assets sector, to which the SEC is yet to respond.
The 10-day deadline ordered this week refers to the SEC’s requirement to provide a legal basis for why it has not responded to the petition.
Coinbase has been attempting to launch a pre-emptive strike against the SEC, which said in March it expected to sue the exchange over allegations of offering unregistered securities products.
Coinbase has been taking a lot of proactive legal action against the SEC ever since it received a Wells Notice from the agency.
A Wells Notice is essentially the last step that the SEC takes before it decides to take legal action so this is likely what caused Coinbase to take action first.
In the past, Coinbase had also submitted a petition in the past that asked around 50 different questions about the regulatory treatment of digital assets.
Of course, the petition was unanswered and the regulatory rules within the US still remain unclear for the most part.
It is expected that Coinbase will continue to diversify its operations overseas in the meantime as these legal actions are in progress.
— Blockchain Daily (@blckchaindaily) May 4, 2023
Despite the lack of public response to the petition, the SEC has increased enforcement and issued warnings to crypto exchanges.
The commission has even issued a Wells notice to Coinbase in the past. A Wells notice letter typically warns a company that the SEC may follow with an enforcement action.
Due to the ongoing regulatory issues faced by the company, U.S. investment bank Citigroup downgraded the shares of the crypto exchange from “buy” to “neutral” and has also lowered its price target. The bank has cited “too many unknowns” as the reason for this downgrade.
According to Citi analyst Peter Christiansen, the downgrade will be Until the regulatory “rules of the road” are better established in the United States.
NEWS: SEC ordered to stop ghosting Coinbase.https://t.co/leqaPGX8yi
— Blockworks (@Blockworks_) May 4, 2023
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