The U.S. Securities and Exchange Commission (SEC) says it needs more time before deciding whether to respond to Coinbase’s request for regulatory clarity regarding the crypto industry.
Coinbase filed a motion in court in April to compel the SEC to respond to a July petition from the company requesting guidance for the digital asset industry.
Last week, the SEC sued Coinbase, alleging the top US crypto exchange operated as an unregistered securities exchange, broker and clearing agency.
That same day, the U.S. Court of Appeals for the Third Circuit issued an order requiring the regulator to respond to Coinbase’s motion within seven days, citing the recently announced lawsuit against the exchange.
The SEC filed a reply on Monday, arguing there is “no merit” to Coinbase’s attempt to compel them to respond to the rulemaking petition quickly.
“The Commission has not decided what action to take on that petition in whole or in part – which is entirely reasonable given the breadth of the rulemaking petition and the fact that it was filed just months ago and supplemented by Coinbase more recently.”
The SEC argues that its ongoing consideration of Coinbase’s rulemaking petition doesn’t undermine existing law and its recent efforts to enforce it. The regulator also says its lawsuit against Coinbase doesn’t mean it has decided to decline the exchange’s request for regulatory clarity.
“There is no inconsistency between the Commission’s allegations that Coinbase has violated long-existing regulatory standards and the Commission’s consideration of whether the current regime should be augmented or modified.”
The SEC argues it shouldn’t have to “bind itself” to a deadline to respond to Coinbase’s petition, but it does note that its staff “anticipates being in a position to make a recommendation to the Commission regarding that petition within the next 120 days.”
Paul Grewal, Coinbase’s chief legal officer, blasted the regulator’s response on Twitter, claiming the SEC’s lawyers “repeat the fallacy” that the Commission hasn’t made any new decisions on crypto regulations.
“They refuse to commit to any deadline despite the Court’s explicit order; they instead ‘anticipate’ making a ‘recommendation’ in 120 days; and most importantly, they ignore the clear statements of the chair that confirm they have no intent to issue new rules, and instead conflate the evidence of a decision those statements provide with an argument that the statements are themselves a decision.”
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