Coinbase continues to seek response from SEC to rulemaking

Coinbase has filed a new petition demanding a clear answer from SEC on whether the agency is ready to issue new rules for the crypto sector, as Coinbase had first requested in 2022. Coinbase doesn’t see SEC’s response as a final decision, saying the agency returned to “square one and restarted the clock”

In July 2022, Coinbase filed a petition with the SEC asking the agency to define which digital assets qualify as securities and asking the agency to propose and adjust rules to regulate them. The petition also included 50 additional questions for SEC.

Last month, Coinbase filed a challenge – a writ for mandamus – a petition asking the court to compel SEC to publish a public response to Coinbase’s original 2022 rulemaking petition.

Related: Coinbase challenges SEC to respond to rulemaking petition

SEC did respond, but said it hadn’t found “constructive ideas” in the exchange’s petition, nor was it prepared to decide on new rules. SEC pointed to similar cases and said the agency had taken 5-10 years to respond in the past. Now the authority proposes to follow the already existing rules for the cryptocurrency sector.

Related: SEC says Coinbase hasn’t proven the need for new framework

Coinbase has filed a petition in support of mandamus asking the court to at least monitor the situation, as it has already made a decision not to issue new rules but hasn’t made it public:

At a minimum, the Court should retain jurisdiction to monitor the agency’s progress toward a decision. That tried-and-true procedure would enable the Court to ensure that the SEC actually considers Coinbase’s petition and decides whether to engage in a rulemaking that the industry and policymakers agree is urgently needed.

In the Argument section, Coinbase adds:

The SEC’s actions confirm what the Chair has said repeatedly: There will be no crypto rulemaking. By the SEC’s own estimate, just since the filing of Coinbase’s petition in July 2022, the agency has instituted more than 25 digital-asset-related enforcement actions. It has threatened others, including recently in a Wells notice to Coinbase. These actions presuppose that the agency believes the securities laws are clear and workable as applied to digital assets and that additional rulemaking is unnecessary.

Furthermore, Coinbase said in regard to SEC’s “actively considering its regulatory approaches”, that the agency “does not dispute that since 2017 it has received five digital-asset-related rulemaking petitions and has acted on none.”