SEC petition for Coinbase’s 2022 crypto rulemaking: No

The United States Securities and Exchange Commission has rejected Coinbase's petition to regulate transactions involving cryptocurrencies. Coinbase filed its petition in July 2022 and has relentlessly pushed for a response.

SEC Chairman Gary Gensler announced the commission's decision in a December 15 statement. It gave three reasons for denying Coinbase's petition, which asked for “laws governing the regulation of securities offered and traded through digital native mechanisms, including laws to identify which digital assets are securities.”

Gensler first argued that existing laws and regulations already apply to crypto. His expression was distorted.

Nothing about the crypto securities markets suggests that investors and issuers are undeserving of the protection of our securities laws.

Paul Grewal, Coinbase's chief legal officer, who signed the petition, anticipated this argument and attached it to the US Supreme Court's discussion of the “clauses” critical to modern securities law in the Howey test and Reves decision. Gensler responded to the arguments in Coinbase's appendix. That was the only section of the 32-page petition that Gensler addressed directly.

RELATED: SEC Sues Coinbase for Violations, Recalls It Tried to ‘Adopt Regulation'

Gensler went on to say that the timing for Coinbase's proposed rulemaking is wrong. The SEC said it is currently soliciting comments on the rules applicable to crypto. Finally, Gensler rules are issued at the agency's discretion:

“We will carefully consider the time and priorities of our regulatory agenda and how we can best utilize our talented and dedicated staff.”

SEC Commissioners Hester Pearce and Mark Uyeda released a joint statement criticizing the decision. They conceded the last two points made by Gensler but suggested that the issues raised in the complaint should be addressed. “Any research on these issues should include public roundtables, concept statements, and requests for comment, giving us the opportunity to hear from a variety of market participants and other interested parties,” they wrote.

And now @coinbase is suing the SEC over this decision. pic.twitter.com/mi0ezkziOu

— Bill Hughes: wchughes.eth (@BillHughesDC) December 15, 2023

Coinbase filed a writ of mandamus requiring the SEC to respond to the petition, nine months after filing the petition and a month after receiving Wells' notice, warning that SCE could take legal action. is it. The SEC said in May that Coinbase does not have the right of mandamus, and that rulemaking could take years.

After several rounds of court filings, the SEC has set December 15th to respond to Coinbase's petition.

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