SEC Ordered 10 Days to File Response to Coinbase’s Petition

A US court has ordered the Securities and Exchange Commission to respond to Coinbase’s complaint for clarity about whether the securities regulator would allow regulation of the industry using existing frameworks.

The latest development emerges amid escalating tensions between the SEC and Coinbase, with past enforcement actions and warnings against crypto companies, including the US crypto giant, intensifying.

The 10-day SEC deadline

Paul Grewal, Chief Legal Officer at Coinbase, took to Twitter to comment announce The 3rd Circuit Court of Appeals issued a text-only order directing the Securities and Exchange Commission (SEC) to file a response to the mandatory cryptocurrency exchange petition within ten days. The court also granted Coinbase the right to file a response within seven days of the SEC’s response.

The original petition dates back to July 2022, when Coinbase asked if the SEC would propose and adopt rules governing the regulation of securities offered and traded via digital native methods. The agency, however, declined to provide specific public responses.

Meanwhile, the SEC issued a notice from Wells to Coinbase indicating its intent to take enforcement action against the exchange.

This prompted Coinbase to file a narrow lawsuit in federal court to force a yes or no response from the securities regulator. In a federal court filing dated April 24, the company said it was “inconceivable that the SEC—an agency with more than 4,500 employees—took nine months (and counting) to complete such a simple task.”

Grewal has previously commented,

“From the SEC’s public statements and enforcement activity in the crypto industry, it appears that the SEC has made its decision to deny our petition. But they haven’t told the public yet. So today’s lawsuit from Coinbase is simply asking the court to order the SEC Sharing her decision.

Since January, the SEC has been aggressively targeting crypto platforms like Bittrex, Gemini, and Lender Genesis, as well as several individual actors accused of manipulating crypto assets, including Tron’s Justin Sun and disgraced Terraform Labs founder Do Kwon. As a result, many companies are now looking to move their operations to friendlier jurisdictions.

global payment

Amid ongoing ordeals with the SEC, Coinbase has launched a marketplace in Bermuda for non-US institutional users. The San Francisco-based exchange will initially offer perpetual Bitcoin and Ethereum futures contracts, with trades settling in the USDC stablecoin.

The announcement of the new project follows regulatory approval from the Bermuda Monetary Authority (BMA).