The U.S. Securities and Exchange Commission (SEC) has not yet made a decision regarding Coinbase’s petition for rulemaking for the cryptocurrency industry. Coinbase had requested clear regulatory guidelines in July 2022 and later submitted a court filing for a writ of mandamus in April 2023 that would compel the SEC to act on their rulemaking petition. On June 7, 2023, the courts ordered the SEC to answer specific questions within seven days. This prompted the SEC’s latest letter, stating that Coinbase’s “extraordinary” request for a writ of mandamus within seven days is without merit.
The SEC has not yet decided what action to take regarding Coinbase’s rulemaking petition, nor has it decided to deny it. The regulator also said there should be no specific deadline for any decision it might make. Furthermore, it said it should not be compelled to provide periodic reports, as requested by Coinbase. The SEC mentioned that its staff “anticipate being able to make a recommendation” internally within 120 days, by October 11. The regulator also said it could provide a status report to the court at the end of that period. The agency urged the court to dismiss Coinbase’s request for a writ of mandamus.
Coinbase CLO Paul Grewal responded by maintaining that statements from SEC Chair Gary Gensler show that the agency does not intend to issue new rules. Grewal insisted that those statements are evidence of a decision, even if they are not a decision in their own right, and said that the SEC had conflated these ideas. However, the SEC stated in its filing that this is an “erroneous” contention by Coinbase. It said that Gensler’s statements (as well as its regular enforcement actions) are not an implicit decision to deny Coinbase’s rulemaking petition. The securities regulator insisted that it is considering Coinbase’s petition “in the ordinary course.”
Coinbase argues that it has been given no clear pathway to register with the SEC, which is part of its defense against a separate lawsuit filed by the SEC on June 6. The lawsuit alleges that Coinbase has violated securities regulations, including charges of offering certain cryptocurrency products and services without proper registration.