- Paul Grewal, Coinbase’s chief legal officer, announced the court’s order.
- The petition was first submitted by Coinbase in July 2022.
In response to Coinbase’s request for clarification, a U.S court has asked the Securities and Exchange Commission (SEC) to state whether or not it would let the sector be regulated using current frameworks. The SEC has recently increased its enforcement proceedings and warnings against cryptocurrency businesses, including Coinbase, the largest cryptocurrency exchange in the United States.
Paul Grewal, Coinbase’s chief legal officer, announced the court’s order to submit a response to Coinbase’s mandamus petition within ten days through Twitter. The Third Circuit Court of Appeals issued a text-only order. Coinbase has been given the opportunity to respond to the SEC’s answer within seven days.
The petition was first submitted by Coinbase in July 2022, requesting that the SEC establish and adopt regulations to regulate the offering and trading of securities using digitally native techniques. However, the organization abstained from making any public statements.
Regulation by Enforcement Approach
Meanwhile, the SEC has informed Coinbase that it intends to take enforcement action against the exchange by issuing a Wells notice. To get a definitive answer from the securities regulator, Coinbase filed a targeted action in federal court.
Since January, the SEC has started going after cryptocurrency exchanges like Bittrex and Gemini and lenders like Genesis, as well as individuals like Tron’s Justin Sun. This has led several businesses to consider relocating to more business-friendly countries. Coinbase recently launched an international derivatives platform for users outside U.S amid ongoing SEC chaos.
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