- Coinbase responds to SEC denial of rule-making petition.
- SEC is trying to destroy crypto industry, Coinbase argues.
- Coinbase asks court to order SEC to begin rule-making.
Coinbase argued in a brief filed with the US Court of Appeals for the Third Circuit that the Securities and Exchange Commission is trying to crush the crypto industry in a “Catch-22″ conundrum.
The SEC demands that digital asset firms come into compliance with securities laws, but has refused to clarify the rules for the compliance it demands, the major US crypto exchange argued in the 36-page filing.
Coinbase claims that the SEC’s policy of “scorched-earth litigation” against companies for their failure to satisfy its demands amounts to an attempt to destroy the industry.
“This pattern of conduct is a purposeful effort to destroy an industry by demanding the impossible and prosecuting companies that fail to achieve it,” the filing says.
It concluded that “the court must order the SEC to commence rule-making.”
Coinbase’s Chief Legal Officer Paul Grewal echoed the argument in a post on X: “The SEC is bent on choking the digital asset industry, and is refusing to provide the necessary rules the industry has requested in order to tighten the squeeze.”
The filing challenges a previous SEC denial of a rule-making petition.
The House of Representatives last month passed a landmark crypto bill, FIT21, that would clarify definitions for crypto assets and divide responsibility between the SEC and the Commodity Futures Trading Commission, but it will likely be bogged down in the Senate as the November election approaches.
The SEC sued Coinbase about a year ago, alleging it was acting as an unregistered national securities exchange, broker, and clearing agency, as well as failing to register the offer and sale of its crypto asset staking-as-a-service programme.
Coinbase has denied the allegations.
Crypto market movers
- Bitcoin is up 0.19% today at $67,714.10.
- Ethereum is up 0.48% today at $3,793.16.