In a comprehensive and detailed thread, Paul Grewal, the Chief Legal Officer of Coinbase, has expressed his concern regarding the U.S. Securities and Exchange Commission’s (SEC) handling of the federal court’s inquiries related to Coinbase’s pursuit of regulatory clarity for the cryptocurrency exchange industry.
Grewal highlights that the SEC’s responses to the Third Circuit’s questions have been evasive, an unusual approach in such matters. He argues that due to the regulator’s failure to provide a satisfactory response, the court should consider granting mandamus, which would legally compel the SEC to fulfill its public duty as mandated by the law.
“We cannot afford to wait until our upcoming deadline to address the SEC’s response to the Third Circuit’s order issued on June 6. It is highly uncommon for the government to defy direct questioning from a federal court. However, the SEC’s elusive reply is even more concerning, as we outline today. The Court should promptly grant mandamus since the Commission has rejected Coinbase’s rulemaking petition and is actively causing harm to the entire industry.”
In April, Coinbase took action by filing a motion to compel the SEC to provide a response to their petition, seeking regulatory guidance for the emerging cryptocurrency industry. Recently, the U.S. Court of Appeals for the Third Circuit issued an order requesting the SEC to respond to Coinbase’s motion within seven days.
Shortly thereafter, the regulator filed a reply stating that Coinbase’s motion held “no merit.” Grewal points out that the SEC’s failure to disclose the time required for a response indicates that their delays are futile.
“The SEC’s refusal to specify the additional time needed to address Coinbase’s petition only reaffirms that further delay would serve no purpose. At the very least, the Court should mandate the Commission to report on its actions—rather than an ‘anticipated’ staff ‘recommendation’—within 60 days, and if the Commission still fails to act, promptly decide on the mandamus petition.”
By emphasizing the unprecedented nature of the SEC’s conduct and reiterating Coinbase’s commitment to seeking regulatory clarity, Grewal aims to shed light on the importance of prompt and transparent decision-making for the benefit of the entire cryptocurrency industry.
