Coinbase CEO reacts as SEC shuns need for crypto rules in its lawsuit

• The U.S. SEC has stated that any crypto rulemaking could take years, so, for now, enforcement actions will suffice.
• The securities regulator made the remarks in its court filing in response to Coinbase’s petition.

In its court response to Coinbase’s petition, the Securities and Exchange Commission (SEC) claimed that any crypto rule-making could take years. Thus, enforcement actions will suffice in the interim.

The SEC noted in the court documents filed on 15 May that it is under no obligation to meet the conditions described in Coinbase’s petition. It further claimed that the business has demanded a complex set of adjustments in a short amount of time.

The SEC has asked the court to dismiss Coinbase’s mandamus petition, arguing that it is an unusual remedy and that Coinbase cannot demonstrate a right to relief.

Only a few hours before the filing, SEC Chairman Gary Gensler gave a keynote address at the Financial Markets Conference, claiming that crypto rules had already been published and were sufficient.

He said:

“If the public is investing money and anticipating profit based upon the efforts of others, in a common enterprise, that’s a security.”

A lot more clarifications left, claims Coinbase legal head

However, in a Twitter thread, Coinbase’s chief legal officer Paul Grewal stated that the submission may be the first time the securities regulator has explained its thoughts. He added that there was still a lot on the table that needed to be clarified.

Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe. 1/7

— Paul Grewal (@iampaulgrewal) May 16, 2023

Grewal further alleged that the SEC has distanced itself from the words and opinions of its head, Gary Gensler. The latter is certain that there are already appropriate controls in place. Moreover, most cryptocurrency already comes under the blanket of security.

According to the SEC’s filing, the regulator is not obligated to rush into crypto-related rule-making.

Grewal concluded:

“Overall, the SEC’s response reinforces Coinbase’s longstanding concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time, and it is likely to continue changing its mind along the way.”