Coinbase Seeks Rulemaking from SEC on Digital Assets
• Coinbase filed a petition to the U.S. Securities and Exchange Commission (SEC) in July requesting that the Commission propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods.
• The cryptocurrency exchange has now filed a reply in support of its petition for a writ of mandamus to the SEC, seeking rulemaking from the agency on digital assets.
• The SEC could respond under the mandamus by rejecting the petition’s call to action, however doing so would open it up to further legal action to compel rulemaking on digital assets.
In July 2020, Coinbase filed a petition with the United States Securities and Exchange Commission (SEC), asking for proposed rules to govern how securities are offered and traded via digitally native methods. The cryptocurrency exchange provided 50 questions for consideration in formulating these rules.
In March 2021, Coinbase was served a Wells notice by the SEC for potential violations of securities law. Coinbase believes this may be related to their July 2020 petition as there has been no other new information since then which would warrant such action against them by the SEC.
Given that Coinbase had not received any response from the SEC regarding their July 2020 petition, they have now filed a writ of mandamus in April 2021 – a formal request that requires an agency or court take action – in order to get some response from them on their proposal for rulemaking on digital assets.
Late last night Coinbase replied in support of their petitition for mandamus with arguments concerning appropriate response time for rulemaking even with such an order being issued by 3rd Circuit Court of Appeals. They argued that this case is different from others due to active enforcement actions being taken by the SEC against them at present which could delay any response further.