Coinbase is Suing the SEC for Almost a Year Over Lack of Response on Petition for Crypto Industry Regulation

The famous crypto exchange platform from Brian Armstrong is taking the fight to the U.S. Securities and Exchange Commission (SEC) as it remained silent for almost a year since it asked for an answer about crypto regulations.

Coinbase is taking the fight to the SEC as it wants "regulatory clarity" on the many scrutinies and prohibitions in the crypto world, one that significantly affects its operations as one of the largest platforms operating in the present.

Coinbase is Suing the SEC for its Lack of Response

Coinbase has filed a lawsuit (via CNBC) against the SEC for its failure to respond to Coinbase's petition regarding the regulation of digital assets like cryptocurrencies.

Coinbase submitted a petition to the SEC in July 2022, seeking clarification on whether existing securities rule-making processes could be extended to the crypto industry, and urging the SEC to "propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods."

Coinbase alleges that the SEC has failed to respond to its petition, leaving the company and the broader crypto industry in a state of regulatory uncertainty.

As a result, Coinbase has taken legal action by filing a lawsuit against the SEC in an attempt to compel the regulator to provide a response.

Regulatory Clarity for SEC's Propositions

In the company's blog post, Coinbase emphasized the need for regulatory clarity in the rapidly evolving cryptocurrency landscape, stating that the lack of clear regulations has created uncertainty and hindered innovation in the industry.

Coinbase had requested the SEC to guide how existing securities laws and regulations could be applied to digital assets, and how companies like Coinbase can comply with these rules.

"Coinbase does not take any litigation lightly, especially when it relates to one of our regulators. Regulatory clarity is overdue for our industry. Yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, even though we have not been told how the SEC believes the law applies to our business," said Paul Grewal, Chief Legal Officer of Coinbase.

Cryptocurrency and Regulation

Cryptocurrency is on a significant rise in the public, and this requires regulations from different agencies, with SEC being in the middle of it all to help both consumers and businesses have fair and sound transactions in the industry. With this, the agency recently established a new office for crypto filings, one that would expand more on its regulations.

Several probes and charges were made to different NFT creators, Marketplaces, and executives like Justin Sun from Tron because of alleged crypto violations under its regulations. Still, this created unclear regulations for the companies to follow, hence the many scrutinies, complaints, and petitions to the agency.

Coinbase's lawsuit against the SEC underscores the urgent need for regulatory clarity in the cryptocurrency industry. The company's commitment to regulatory compliance and its efforts to seek guidance from the SEC reflect the industry's desire to operate within a transparent and compliant framework for its future operations.