SEC says Coinbase lawsuit is baseless

SEC says Coinbase suit won't force new crypto rules.

The U.S. Securities and Exchange Commission (SEC) responded to Coinbase’s lawsuit, saying it was not obliged to issue new rules, and that the company “has no right to sue the regulator”.

“Neither securities laws nor the Administrative Procedure Act impose on the SEC an obligation to issue a broad spectrum of new rules governing digital assets requested by Coinbase,” the appeal says.

The trading platform filed a lawsuit to obtain a response from the SEC to its July 2022 petition. The exchange sought clarity in cryptocurrency regulation.

The company moved aggressively after receiving a notice of an investigation into listing procedures on the platform and its products — Coinbase Prime, Coinbase Wallet, and staking service Coinbase Earn.

The SEC called Coinbase’s allegations “baseless” and added that the regulator could still implement new rules for cryptocurrencies.

The regulator’s lawyers said that “the Commission continues to consider Coinbase’s motion in the ordinary course.” In their words, the regulator continues to take action against digital assets that it classifies as securities.

Referring to the 2017 report, Commission officials noted that for many years they had given guidance to crypto companies in addition to enforcement actions.

The SEC added that it has not rejected Coinbase’s petition. Moreover, it will help the Commission draft a framework of rules that will satisfy the crypto market.

Earlier, Coinbase CEO Brian Armstrong said that the SEC has embarked on a “crusade” against the digital-asset industry.

In May, the US Chamber of Commerce backed Coinbase and accused the regulator of deliberately creating a dangerous and uncertain environment for crypto companies in the country.