Coinbase files petition for review after SEC rejects rulemaking petition

Coinbase Chief Legal Officer Paul Grewal warned that Coinbase would take legal action earlier Friday

article-image

Sergei Elagin/Shutterstock modified by Blockworks

share

Coinbase officially filed a legal challenge to the US Securities and Exchange Commission’s denial of its rulemaking petition from 2022. 

Coinbase Chief Legal Officer Paul Grewal posted on X about the filing, saying, “Promise made, promise kept.”

Grewal called the decision “arbitrary and capricious.”

In its petition for review, Coinbase argued that the SEC’s denial is an “abuse of discretion and contrary to law, in violation of the Administrative Procedure Act.”

“The Commission’s refusal to engage in rulemaking, even while it continues a campaign of regulation by enforcement against Coinbase and others that exceeds its statutory authority, flouts the APA and fundamental principles of fairness it embodies,” Coinbase said. 

Read more: Peirce, Uyeda ‘disagree’ with SEC decision to deny Coinbase petition

The July 2022 petition was filed by Coinbase arguing that crypto needs an “updated rulebook” to guide companies, and “crypto assets that are not securities need the certainty of being outside those rules.”

After the SEC didn’t respond to the petition — and Coinbase received a Wells Notice — the exchange took things further and filed a writ of mandamus with the Third Circuit. Coinbase filed its petition for review in the same docket. 

Coinbase gave the SEC two requests for action earlier this year, with the SEC declining to give them regulatory clarity. 

The SEC also has an open lawsuit against Coinbase. It claims that the company operated as an unregistered exchange while offering and selling unregistered securities. It also targeted its staking product. 

SEC Chair Gary Gensler said on Friday that he agreed with the SEC’s decision to deny Coinbase’s rulemaking petition.

“The Commission and its staff are currently pursuing numerous undertakings applicable to crypto asset securities and intermediaries, and the Commission’s assessment of whether and, if so, how to alter the existing regulatory regime may be informed by the results of these initiatives,” he said.

Coinbase’s Grewal said, “no one looking fairly at our industry thinks the law is clear or that there isn’t more work to do.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit

article-image

The Boston Globe reports that lawyer John Deaton is weighing a possible bid

article-image

Ethereum’s Dencun upgrade will enable Uniswap v4 to optimize smart contracts for complex functionality