Coinbase, a prominent U.S.-based crypto exchange, is persisting in its pursuit of clear regulatory frameworks for cryptocurrencies categorized as securities. After the U.S. Securities and Exchange Commission (SEC) rejected Coinbase’s plea for cryptocurrency rulemaking on December 15, the exchange swiftly filed an appeal.
Paul Grewal, Coinbase’s Chief Legal Officer, immediately pledged action upon hearing about the SEC’s denial. By December 18, the U.S. Third District Court of Appeals mandated the SEC to submit its decision record by January 24, 2024.
In its appeal, Coinbase detailed the exhaustive process it undertook to prompt the SEC’s response to its plea. The exchange criticized the SEC’s refusal, calling it “arbitrary and capricious, an abuse of discretion, and against the law,” citing violations of the Administrative Procedure Act.
Coinbase argued that the SEC’s dismissal of its rulemaking efforts while pursuing enforcement actions beyond its authority contradicts fairness and regulatory procedures.
The SEC’s denial, which faulted Coinbase’s petition for lacking a proposed rule’s substance, drew backlash from the crypto community. SEC Chair Gary Gensler, in response, emphasized the applicability of existing laws and the SEC’s role in regulating crypto securities through rulemaking. He defended the agency’s discretion in setting regulatory priorities.
Headquartered in San Francisco, Coinbase has actively backed the crypto industry through political donations, lobbying, and public advocacy. The SEC’s lawsuit against Coinbase in June alleged securities violations.
