Coinbase continues to make efforts to ensure adequate legislation regarding cryptocurrencies used as securities. After the U.S. Securities and Exchange Commission denied Coinbase’s request for cryptocurrency regulations on December 15, the crypto exchange filed an appeal of the decision the same day.
Coinbase General Counsel Paul Grewal promised to take immediate action as soon as the SEC’s refusal becomes known. On December 18, the 3rd US Circuit Court of Appeals ordered the SEC to file a record of its decision by January 24, 2024. “Today, the SEC denied Coinbase’s petition for cryptocurrency regulations. After 18 months of silence, we went to court to get the answer the law requires. With gratitude to the Third Circuit, we will seek its help again later today by challenging the SEC’s denial. exchanges from their duties,” tweeted Paul Grewal (@iampaulgrewal).
In its appeal, Coinbase documented the lengthy process it took to force the SEC to respond to its petition. He called the SEC’s denial of her petition “arbitrary and capricious, an abuse of discretion and contrary to law and in violation of the Administrative Procedure Act.” Additionally: “The Commission’s refusal to engage in rulemaking, even as it continues its regulatory enforcement campaign against Coinbase and others, which exceeds its statutory authority, ignores the APA (Administrative Procedure Act) and the fundamental principles of fairness that it embodies “.
The SEC’s denial letter accused Coinbase’s petition of lacking the “text or substance of any proposed rule” required to file a petition. The SEC further disagreed with the petition’s assertion that the existing rules are “unworkable” and said the agency has discretion to determine the priority and timing of regulations. SEC Chairman Gary Gensler released a statement following the official denial. “I was pleased to support the Commission’s decision for three reasons. First, existing laws and regulations apply to the cryptocurrency securities markets. Second, the SEC also addresses the cryptocurrency securities markets through rulemaking. Third, it is important to preserve the Commission’s discretion in setting their own rulemaking priorities,” Gensler said.
The SEC’s refusal was heavily criticized by the crypto community. San Francisco-based Coinbase has taken a number of actions to support the cryptocurrency industry, including political donations, lobbying and public actions. In June, the SEC sued Coinbase for securities violations.