The cryptocurrency exchange owned by Coinbase Global Inc (NASDAQ: COIN) recently requested regulatory clarity from the Securities and Exchange Commission (SEC), and the agency has now responded.
What Happened: Coinbase petitioned a federal court in April to require the SEC to issue clear guidelines for cryptocurrency exchanges and companies.
The SEC has responded, stating that Coinbase does not have the right to mandamus, which is a court order that obligates a government agency to fulfill specific duties.
"Perhaps recognizing this, Coinbase instead asserts that this Court should compel the Commission to act on Coinbase's recently filed rulemaking petition. But no statute or regulation requires the Commission to take such action on a specific timeline," the SEC wrote in its response.
The SEC also argued that it has been actively considering the issues raised by Coinbase and that deliberating over significant changes takes time.
"Deliberating over the kind of significant changes sought by Coinbase, which could affect both crypto assets and the securities markets more generally, takes time-including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance," the SEC wrote.
Paul Grewal, Coinbase's Chief Legal Officer said, "The SEC's response reinforces Coinbase's long-standing concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time, and it is likely to continue changing its mind along the way. "
"Today the SEC responded to Coinbase's petition for a writ of mandamus - asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC's answer? A resounding maybe," Grewal tweeted.
Why It Matters: Coinbase filed its suit in response to a Wells Notice it received in March 2023, which pertained to issues the agency found with the exchange's Wallet and Prime services.
The SEC added, "Coinbase would like its policy preferences addressed immediately does not entitle it to extraordinary relief ordering the Commission to act on a rulemaking petition that has been pending for well under a year."
Coinbase is a crypto exchange that allows trading in cryptocurrencies such as Bitcoin and Ethereum.