Coinbase, one of the world’s leading cryptocurrency exchanges, has filed a lawsuit against the United States Securities and Exchange Commission (SEC). The lawsuit comes after Coinbase filed a petition last summer for a specific regulation for digital assets, asking the commission to draft and approve such a regulation.
However, since Coinbase filed that request, the SEC has not provided an affirmative or negative response to the petition. Although the agency has reopened custody and exchange regulations to explicitly include digital assets, it has not gotten involved in writing a specific rule for them.
The lawsuit filed by Coinbase is an injunction, which is a type of “exceptional circumstances” lawsuit in which a court can compel federal officials to act. The company seeks to compel the SEC to provide a yes or no answer to its request for specific regulation for digital assets.
The SEC has already taken several enforcement actions against cryptocurrency companies, including an investigation against Coinbase over the inclusion of certain digital assets on its platform, as well as its wallet and staking services. The agency has also accused a former Coinbase employee of preempting the platform’s public listing of clients in a landmark insider trading case for the digital asset industry.
Coinbase vs. the United States SEC
The lawsuit filed by Coinbase is not the only legal battle the company has faced with the US government. Aside from the SEC investigation into the listing of certain digital assets on Coinbase, the platform backed a lawsuit against the Department of US Treasury for Sanctioning Transaction Mixer Tornado Cash.
In addition, the SEC and federal prosecutors charged a former Coinbase employee last year with insider trading. The SEC alleged that nine of the tokens listed by Coinbase were unregistered securities, which could result in fines and penalties for the company.
Coinbase seeks answers
Coinbase’s chief legal officer, Paul Grewal, explained in a blog post that the lawsuit filed by the company simply seeks the SEC to share its public decision on Coinbase’s request for specific regulation for digital assets. Grewal said that while the SEC appears to have already made a decision to deny the petition, it has not yet told the public.
Coinbase is represented by several outside lawyers, including Eugene Scalia, a partner at the Gibson Dunn law firm, who has won several lawsuits against financial regulators. If the SEC refuses to make a new regulation, Coinbase may file another lawsuit in an attempt to force a federal court to do so.
To end
In conclusion, Coinbase has filed a lawsuit seeking a response from the SEC on its request for specific regulation for digital assets. Although the SEC has reopened custody and exchange regulations to explicitly include digital assets, it has not gotten involved in writing specific regulations for them. The lawsuit filed by Coinbase is an injunction and seeks to compel the SEC to provide an affirmative or negative response to its petition.
Coinbase is also facing other legal battles with the US government, including an SEC investigation into the listing of certain digital assets on its platform and an upheld lawsuit against the Treasury Department over the sanction of transaction mixer Tornado Cash. The firm is simply seeking the SEC to share its decision publicly on its petition and is represented by several outside attorneys, including Eugene Scalia, a partner at the Gibson Dunn law firm.
