Court ruling fuels Coinbase’s regulatory quest against SEC
Coinbase’s chief legal officer, Paul Grewal, recently spotlighted the SEC’s apparent evasiveness on crypto regulation-related questions from a federal court.
In the uncertain landscape of cryptocurrency regulation, another significant clash has taken center stage.
Paul Grewal, Chief Legal Officer of Coinbase, has publicized an intriguing development via Twitter. The Third Circuit has decided to retain jurisdiction over Coinbase’s challenge to the SEC’s inaction on the crypto platform’s request for basic rules for the crypto industry.
Coinbase’s petition for a writ of Mandamus against the SEC is at the core of this legal standoff. The goal of this petition is to urge the SEC to take action to provide clarity on cryptocurrency regulation.
Despite not yet ruling on Coinbase’s petition, the court has chosen to maintain jurisdiction over the case and now requires the SEC to provide an update on its progress by October 11, 2023.
Crypto community reacts
The court’s decision has stirred diverse reactions within the crypto community. Ripple’s Chief Technology Officer, Davie Schwartz, expressed triumph and disappointment.
He welcomed the court’s insistence on the SEC disclosing their ruling timetable but was let down by the four-month grace period the SEC has been given to provide a progress update.
Similarly, Bill Morgan, a lawyer and digital asset enthusiast, highlighted the court’s ruling as a victory for Coinbase.
Grewal called out SEC’s evasive tactics
Meanwhile, earlier in June, Grewal accused the SEC of defying direct questions from a federal court.
According to him, the SEC’s failure to provide a proper response meant that the court should grant Mandamus, or an order compelling the SEC to do something legally obligated under public duty.
He mentioned the unusualness of a government body like the SEC defying a direct question from a federal court.
Grewal further noted that the SEC’s evasive responses further justified the grant of Mandamus, as he believed the SEC had decided not to grant Coinbase’s rulemaking petition and was actively harming the industry.
The SEC had stated that there was “no merit” to Coinbase’s motion, a response that Grewal labeled as evidence of further delay being “futile.”
The road ahead
As the narrative unfolds, market participants and enthusiasts keenly watch this legal standoff. The hope is for a more transparent and well-defined regulatory framework that promotes innovation while ensuring investor protection.
The saga of Coinbase’s legal battle against the SEC has just begun, and its outcome might be a significant turning point in the US cryptocurrency industry.