According to recent reports, Coinbase has submitted a letter accusing the Securities Exchange Commission of ignoring its request for the SEC to create a regulatory framework for digital assets and continuing to avoid Coinbase’s rulemaking request.
SEC Asks for 120 Extra Days to Respond
Following the SEC’s June 13 filing asking for an extra 120 days to respond to Coinbase’s regulatory request, this letter was sent on June 17. According to the crypto exchange, the SEC is uncertain about updating the Court on its judgment and “bristles even at being ordered to update the Court on its progress.”
No Straight Answers
As stated in the letter,
“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 a tweet, Paul Grewal, the chief legal officer of Coinbase, said that it is “unusual for the government to defy a direct question from a federal court.” Grewal added that since the SEC rejected Coinbase’s petition, he is expecting that the court would issue a writ of mandamus.
Coinbase CEO Calls for Regulatory Clarity
In an interview with the Wall Street Journal on June 1, the CEO of Coinbase voiced that the United States should get a “regulatory clarity,” he stated that other countries, such as the United Kingdom, only have one financial regulator, but the US now has a “turf war” between two regulatory bodies. It is significant to note that the exchange has already sued the SEC for regulatory ambiguity.
Coinbase has endured years of regulatory scrutiny and legal disputes with American regulators. Coinbase’s cryptocurrency lending facility was at the center of a lawsuit from the SEC in 2021, which raised issues regarding investor protection.
Enforcement Actions Against Coinbase
Additionally, regulators have reprimanded the crypto exchange for breaking anti-money laundering (AML) and know-your-customer (KYC) requirements.
Due to suspected AML laws breaches, the Department of Financial Services (DFS) penalized Coinbase $100 million. In March, The SEC sent the company a “Wells notice” over some of the digital assets it had offered on its official platform.