Coinbase has criticized the Securities Exchange Commission (SEC) for dodging its rulemaking petition as part of its ongoing legal case against the regulator.
On June 13, the SEC informed the court that it had yet to decide on a course of action regarding the petition, adding that there should be no specific deadline for a response or a requirement to provide periodic reports per the plaintiff’s request.
Coinbase urged the SEC to issue regulatory guidance for the digital asset industry in July 2022, which in part led to the exchange suing the agency in April following a failure to respond.
In the latest, a letter from Coinbase’s defense team reiterated previous claims that the SEC refused to provide regulatory clarity while demanding compliance with non-existent rules.
Quoting SEC chair Gary Gensler, who said, “The rules and regulations are already clear,” in the days following the agency suing Coinbase, Coinbase argued that the agency would not likely engage in rulemaking and a writ of mandamus is required to compel the agency to perform.
On June 6, the SEC sued Coinbase, alleging it had violated several securities laws, including operating as an unregistered exchange.
Coinbase pointed out inconsistencies in the SEC’s approach, stating, in its June 13 filing, that it had yet to decide on its rulemaking policies, contradicting Gensler’s statement above.
“When ordered by this Court to address the stark inconsistency between its litigating position and its actions and statements elsewhere, the SEC still offers no straight answers and instead repeats its talking points”
In addition, further criticism was leveled at the agency’s failure to address the overlap between its enforcement action against Coinbase and the exchange’s legal filing for clear rules.
“The SEC’s observation that an agency can pursue both enforcement and rulemaking ignores the unprecedented nature of its conduct here.”
A refusal to provide rules defining cryptocurrencies and a path to registration, instead, legislating by enforcement, is not a “lawful substitute,” said Coinbase.
For those reasons, it urged the court to grant its mandamus petition.
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