Cryptocurrency exchange Coinbase has taken an extraordinary step in its battle with the Securities and Exchange Commission (SEC) by filing a writ of mandamus in federal court. This legal maneuver is a forceful request for the court to compel the SEC to fulfill its regulatory obligations regarding cryptocurrencies. Coinbase’s move signifies a last-ditch effort, given the significant legal challenges associated with obtaining a writ of mandamus.
The SEC swiftly responded, asserting that cryptocurrency regulation falls outside its jurisdiction. The commission emphasized that it is not obligated to adopt the rules proposed by Coinbase. The SEC’s stance on whether cryptocurrencies should be classified as securities remains vague, creating regulatory uncertainty.
Coinbase and other industry players argue that the SEC’s lack of clarity and its reliance on enforcement actions exacerbate market volatility and unfairness. By failing to provide clear regulatory guidelines and using enforcement as a substitute for rulemaking, the SEC’s discretion has been questioned based on past Supreme Court rulings.
In response to Coinbase’s legal move, the SEC also downplayed the significance of statements made by its chairman, Gary Gensler, emphasizing that they do not represent official policy.
Coinbase’s Chief Legal Officer, Paul Grewal, addressed the situation on Twitter, pointing out that the SEC indicated rulemaking could take years and showed no urgency in the matter. Although a court decision on the mandamus petition may take a considerable amount of time, legal experts generally agree that Coinbase’s request might be premature considering the complexity of the issue.
The outcome of this legal battle will have far-reaching implications for the crypto industry, as Coinbase pushes for regulatory clarity and the SEC maintains its position.
Also Read: SEC Counters Coinbase’s Petition for Urgent Crypto Regulations
