A top Coinbase executive is warning that the U.S. Securities and Exchange Commission (SEC) may frequently change its position on digital assets before possibly crafting new crypto regulations.
Paul Grewal, chief legal officer at top US exchange Coinbase, tells his 37,100 Twitter followers that a new SEC court filing shows there may not exist regulatory clarity for the crypto industry for quite some time.
Coinbase filed a motion in April to compel the SEC to respond to an earlier petition from the company requesting regulatory guidance for the digital asset industry. The SEC filed its response on May 15th.
Says Grewal in reaction to the SEC’s filing,
“Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe.”
According to Grewal, the SEC may take years to craft clear regulations for the crypto industry.
“The SEC told the court that rulemaking may take years and they’re in no rush.”
He also warns that before any new rules are crafted, the top US securities regulator will continue to take enforcement action against players in the crypto industry and its positions on digital assets will likely shift over time.
“The SEC acknowledged that it will continue to use enforcement actions as a substitute for rulemaking for the foreseeable future, but not to worry — those enforcement actions may eventually ‘inform’ not-yet-planned rulemaking.
The SEC also said that the public statements by [SEC] Chair [Gary] Gensler are not formal guidance or policy statements from the SEC and the public cannot rely on them as such.
Overall the SEC’s response reinforces Coinbase’s longstanding concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time, and it is likely to continue changing its mind along the way.”
Coinbase plans to submit a reply to the SEC’s filing next week, according to Grewal.
In March, the SEC sent a Wells Notice to Coinbase after making a “preliminary determination” to recommend enforcement action against the crypto exchange for allegedly violating securities laws.
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