U.S. court orders SEC to respond to Coinbase’s petition

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The U.S. Secu­ri­ties and Exchange Com­mis­sion (SEC) has been ordered on Tues­day by the Unit­ed States Court of Appeals for the Third Cir­cuit to respond to cryp­tocur­ren­cy exchange Coinbase’s pend­ing peti­tion for rule­mak­ing with­in sev­en days. 

See relat­ed arti­cle: Cryp­to indus­try reacts to SEC’s law­suit against Binance

Fast facts

  • In April, Coin­base, the largest cryp­tocur­ren­cy exchange in the U.S., sued the SEC under the Admin­is­tra­tive Pro­ce­dure Act, seek­ing that the reg­u­la­tor be ordered by a court to pub­licly respond to its July 2022 peti­tion ask­ing for clear­er cryp­to regulations. 
  • In its order on Tues­day, the court asked the SEC to clar­i­fy whether Coinbase’s rule­mak­ing peti­tion has been denied, and if not, then how much time would SEC require to decide whether to deny or grant that petition. 
  • “We con­tin­ue to believe that rules of the road, from leg­is­la­tion or rule­mak­ing or both, must come before enforce­ment actions. That is why we peti­tioned the SEC for rule­mak­ing near­ly a year ago in the first place,” Paul Gre­w­al, the chief legal offi­cer of Coin­base, said in a Tweet on Wednesday. 
  • “If the SEC’s answer to our peti­tion for rule­mak­ing is ‘no,’ then they are required by law to tell us, because we have the legal right to ques­tion that ‘no’ in court. And there are seri­ous ques­tions to be asked,” Gre­w­al said
  • The SEC on Tues­day sued Coin­base for alleged­ly vio­lat­ing secu­ri­ties rules, a day after the reg­u­la­tor sued Binance, the world’s largest cryp­to exchange, on sim­i­lar charges. Ear­li­er in March, the SEC had issued a Wells notice to Coin­base and said it was con­sid­er­ing legal action against the exchange over its stak­ing ser­vices and oth­er products. 
  • Reg­u­la­tors in the U.S. have been bear­ing down on cryp­to exchanges despite fail­ing to set clear reg­u­la­tions for how the indus­try should oper­ate. In Feb­ru­ary, the SEC fined U.S. cryp­to exchange Krak­en and shut its cryp­to stak­ing pro­gram. In April, the SEC charged Seat­tle-based cryp­to plat­form Bit­trex with oper­at­ing an unreg­is­tered exchange.
  • Coin­base shares on the Nas­daq rose as much as 2.19% dur­ing pre­mar­ket trad­ing on Wednes­day. It dropped 12.09% at the close on Tues­day after a 9.05% fall on Monday. 
  • See relat­ed arti­cle: Hong Kong? Sin­ga­pore? Tokyo? Seoul? Dubai? The race is on for the Web3 hub of Asia | Part 1



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