As promised, Coinbase will dismiss the SEC’s rulemaking petition

Coinbase continues its efforts to establish adequate legislation on cryptocurrency that can be used as collateral. After the United States Securities and Exchange Commission rejected Coinbase's petition against the cryptocurrency on December 15, the crypto exchange appealed the decision on the same day.

Coinbase's chief legal officer, Paul Grewal, vowed to take immediate action as soon as the SEC's rejection became known. On December 18, the US Third Circuit Court of Appeals ordered the SEC to file its decision by January 24, 2024.

In its appeal, Coinbase documented the lengthy process required to compel the SEC to respond to a complaint. The SEC dismissed the petition, calling it “arbitrary and frivolous, an abuse of discretion and unconstitutional, in violation of the Administrative Code.” in addition to:

“While the commission continues its enforcement campaign against Coinbase and others that exceed its statutory authority, the APA's refusal to engage in rulemaking [Administrative Procedure Act] and includes basic principles of fairness.

The SEC's denial letter erred because it lacked the “text or content of any proposed regulation” as necessary to state Coinbase's petition. The appeal disputes the claim that the existing rules are “unworkable” and that the agency has discretion over preemption and regulatory time. The denial was criticized by the crypto community.

RELATED: Coinbase CEO Says Abandoning US ‘Still Not Even In The Field Of Possibility' – Report

SEC Chairman Gary Gensler issued a statement that closely followed the official denial.

Today the SEC denied Coinbase's request for crypto regulations. After 18 months of silence, we went to court to get the response the law requires. With his previous accolades for the third round, we'll be asking for his help later today in challenging the SEC's demotion. ⬇️ pic.twitter.com/tFjiW53eF7

— paulgrewal.eth (@iampaulgrewal) December 15, 2023

San Francisco-based Coinbase has taken various steps to support the cryptocurrency industry, including political donations, lobbying and public action. The SEC sued Coinbase for security violations in June.

Magazine: Binance, Coinbase Heads to Court, and SEC Accounts 67 Crypto-Securities: Hodler's Digest, June 4-10