Coinbase Rulemaking Petition Denied By The SEC

Key Points:

• The SEC rejects the Coinbase rulemaking petition, citing existing regulations’ sufficiency and the importance of its own discretion.
• Coinbase’s July 2022 petition led to a legal tussle with the SEC, which sued the exchange for unregistered securities operations.

In a recent development, the U.S. Securities and Exchange Commission (SEC) has officially denied the Coinbase rulemaking petition.

SEC Denies Coinbase Rulemaking Petition Amidst Legal Clash

The decision, supported by the SEC Chair, emphasizes three key points. Firstly, existing laws and regulations already apply to the crypto securities markets. Secondly, the SEC addresses crypto-securities markets through rulemaking as well. Lastly, maintaining Commission discretion in setting its own rulemaking priorities is deemed crucial.

The SEC’s decision comes after the Coinbase rulemaking petition in July 2022, urging the SEC to issue new rules or guidance for crypto exchanges to establish an effective registration framework. Instead of engaging meaningfully with Coinbase‘s request, the SEC chose to sue the platform for operating an unregistered securities exchange. In response, Coinbase filed its own lawsuit in April, seeking a mandamus, a binding court order directed at government agencies.

SEC’s Firm Stance as Coinbase’s Petition Hits Roadblock

Coinbase’s mandamus aimed to propel the stalled petition for SEC rulemaking forward. The company had hoped to force the SEC’s hand amid ongoing legal battles. The rejection of the Coinbase rulemaking petition adds another layer to the exchanges’ defense against SEC litigation. The SEC’s stance reinforces that existing securities laws apply comprehensively to crypto securities markets, echoing the inclusive definition of a security outlined in the 1933 and 1934 acts.

The SEC’s commitment to investor protection remains steadfast, and the denial of the Coinbase rulemaking petition underscores the agency’s emphasis on established legal principles.

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