The chief legal officer of Coinbase says the U.S. Securities and Exchange Commission (SEC) is defying questions from a federal court related to the crypto exchange’s request for regulatory clarity.
In a lengthy thread, Paul Grewal says that the SEC is answering the Third Circuit’s questions in an evasive manner, which the executive says is “unusual.”
According to Grewal, because the regulator failed to formulate a proper response, the court should grant mandamus, or an order for an entity to do something they are legally obligated to under the law related to public duty.
“We couldn’t wait until our deadline next week to address the SEC’s response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court. But the SEC’s evasive response goes further, as we set out today.
The Court should grant mandamus now because the Commission has decided not to grant Coinbase’s rulemaking petition and is actively harming the industry.”
In April, Coinbase filed a motion to compel the SEC to respond to a petition from the firm requesting regulatory guidance for the nascent crypto industry.
Earlier this month, the U.S. Court of Appeals for the Third Circuit issued an order asking the SEC to reply to Coinbase’s motion within seven days.
The regulator filed a reply a few days later saying there was “no merit” to Coinbase’s motion.
According to Grewal, the fact that the SEC won’t say how much time it needs to respond proves their delays are “futile.”
“The Commission’s refusal to say how much additional time it needs to act on Coinbase’s petition confirms that further delay is futile.
At a minimum, the Court should order the Commission to report on its action – not an ‘anticipated’ staff ‘recommendation’ – in no more than 60 days and decide the mandamus petition promptly if the Commission still has not acted at that time.”
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