For the government, it is unusual to ignore a direct question from a federal court, but the SEC’s evasive response goes beyond that. This is how Coinbase’s chief legal officer Paul Grewal commented on the Commission’s reaction to the regulatory-clarity proceedings with Coinbase.
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 13, representatives of the Commission asked the court for an additional 120 days to respond to Coinbase’s petition urging a response to the July 2022 request. In the latter, the company sought clarity on the regulation of the crypto industry.
filed a lawsuit on April 25. A month later the company sent a Mandamus petition — an order directing a public official or other person to perform actions that it is required by law to perform.
Coinbase’s lawyers took this step after the SEC said the firm’s claims were ‘baseless’. Officials noted that the agency is not obliged to issue new rules, and the company ‘has no right to sue the regulator’.
In a new letter dated June 17, the platform’s representatives stressed that the Commission does not provide ‘direct answers and instead repeats its theses’, although ‘the court ordered to eliminate the evident mismatch between the agency’s position in the proceedings and its actions and statements elsewhere’.
According to the document, the SEC’s “silence”, prolonged delays in responding, and the agency’s enforcement actions continue to press on the crypto industry. Chairman of the Commission Gary Gensler “continues to move down a path that would cause irreparable damage to the US public company and the entire industry”.
Grewal expressed hope that the court would grant the mandamus petition. Coinbase requested a 60-day extension to respond to the SEC starting from June 13.
Earlier, the head of the exchange Brian Armstrong said that the agency had gone on a “crusade” against the digital-asset industry.
The company took aggressive action after receiving notice of an investigation into the listing procedures on the platform and its products — Coinbase Prime, Coinbase Wallet and staking service Coinbase Earn.
In June the SEC sued Binance and Coinbase. In the latter, they refused to change their business model because of the Commission’s lawsuit.
Grewal called the agency’s approach to regulating the crypto industry ‘undermining the competitiveness of the United States’.
On June 15, the Coinbase chief legal counsel reacted to the SEC’s proposal to expand the definition of an exchange to DEX. The official said that the agency’s powers do not include the authority to ban [decentralized platforms] absent clear congressional authorization.