Following a court order, Coinbase, a prominent cryptocurrency exchange, has strongly criticized the U.S. Securities Exchange Commission (SEC) for evading inquiries in their ongoing legal dispute. In a letter filed on June 17 with the Court of Appeals, the exchange’s lawyers expressed their disappointment with the SEC’s persistent refusal to address Coinbase’s rulemaking petition, which seeks to establish a regulatory framework for digital assets.
Coinbase’s letter highlighted the SEC’s lack of direct answers and its repetitive use of talking points when confronted with the inconsistency between its litigation stance and its actions and statements elsewhere. The letter was in response to the SEC’s request on June 13 for an additional 120 days to respond to Coinbase’s rulemaking petition.
According to Coinbase, the SEC seems reluctant to provide updates to the Court about its decision-making process, displaying resistance even when directed to do so. The exchange argued that the SEC’s silence, along with the extensive delays and enforcement actions, continues to impose a burden on the cryptocurrency industry. Coinbase further warned that SEC Chair Gary Gensler’s current trajectory could irreparably harm not only a U.S. public company but an entire industry.
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. 1/5 pic.twitter.com/ssULmUpzi2— paulgrewal.eth (@iampaulgrewal) June 17, 2023
On June 17, Paul Grewal, Coinbase’s chief legal officer, expressed his surprise on Twitter, stating that it is uncommon for the government to disregard a direct question from a federal court. Grewal expressed hope that the court would issue a writ of mandamus, compelling the SEC to fulfill its official duties under the law, given the rejection of Coinbase’s petition.
In its submission, Coinbase is also proposing that the court establish a deadline of 60 days or less starting from June 13, aligning with the SEC’s request date.
In a separate legal case, the SEC sued Coinbase on June 6, alleging that the trading platform violated various securities regulations, particularly by offering cryptocurrencies that the regulator deems to be unregistered securities.