Coinbase cites SEC action against Kraken for crypto rulemaking

US-based cryptocurrency exchange Coinbase has renewed calls to compel the Securities and Exchange Commission (SEC) to respond to the company's petition to create regulations on crypto using Kraken, the regulator's latest enforcement action to support its claims.

In a Nov. 22 filing with the U.S. Court of Appeals for the Third Circuit, lawyers representing Coinbase responded to a Nov. 21 letter from the SEC saying it plans to file a status report on the crypto rulemaking petition on Dec. 15. Coinbase filed its petition in July 2022 asking the SEC to “propose and adopt regulations to govern the regulation of securities offered and traded through digital native means,” with subsequent responses indicating delays.

“[O]An order by this court will make the commission operational, the letter said. “While the agency's fear of a court decision prompted it to do something, it issued another ‘report' – while continuing to shorten and delay – confirming that only mandamus would force the commission to fully push it, finally admitting that Coinbase's legal process is questionable.” Pocket-vetoed a long time ago.”

We filed a brief response to yesterday's SEC “update” rulemaking petition. We appreciate the Third Circuit's attention to this matter. pic.twitter.com/TOFfn0wWYu

— paulgrewal.eth (@iampaulgrewal) November 22, 2023

Related: Binance payments prove ‘following the rules' is the right decision – Coinbase CEO

Coinbase cited the SEC's enforcement action against Kraken in a lawsuit on November 20, in which the commission commingled crypto exchange customer funds and failed to register as a securities exchange, broker, dealer and clearing agency. The letter did not mention the settlement of civil and criminal cases against major crypto exchange Binance on November 21, which did not include the ongoing case with the SEC.

“Kraken's action was necessarily approved by the commission […] It is further evidence that the Commission is not interested in regulatory transparency.

The push for legislation comes as reports suggest the SEC may reach a decision on a bitcoin (BTC) exchange-traded fund to list on US markets. Approval may be one of the most significant positive trends towards mainstream crypto adoption.

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