SEC Chair Gary Gensler released a 4-minute video taking shots at the crypto industry, claiming them to be "investment contracts." 

A US Court Orders the SEC to Respond to Coinbase’s Rulemaking Petition in 7 Days

  • The SEC filed a lawsuit against Binance on Monday and another against Coinbase on Tuesday.
  • The regulator accused both exchanges of offering unregistered securities.
  • Crypto users believe the lawsuits against Binance and Coinbase is the SEC’s biggest power play.

A US court has given the Securities and Exchange Commission (sec) seven days to provide its view on a rulemaking petition by cryptocurrency exchange Coinbase. Judge Cheryl Ann Krause of the U.S. Court of Appeals for the Third Circuit ordered the SEC to disclose if it has decided to dismiss Coinbase’s petition and, if not, how long it will take to decide its position. 

Coinbase filed an Administrative Procedure Act challenge in April, requiring the SEC to react to its 2022 petition for formal regulations in the digital assets sector. The crypto exchange claimed that the current guidelines are insufficient for digital assets.

Coinbase chief legal officer Paul Grewal wrote in a tweet, “If the SEC’s answer to our petition for rulemaking is “no,” then they are required by law to tell us, because we have the legal right to question that “no” in court. 

The Coinbase legal officer wrote in a thread,

We continue to believe that rules of the road, from legislation or rulemaking or both, must come before enforcement actions. That is why we petitioned the SEC for rulemaking nearly a year ago in the first place.

Grewal added that the petition “matters not just to our industry – this is core to the proper working of government agencies and the way they engage with the public.”

This comes hours after the SEC filed a lawsuit against Coinbase for operating an unregistered securities exchange. On Tuesday, the SEC accused Coinbase of marketing unregistered securities through its staking service.

Coinbase has called for clarity concerning guidelines for digital assets in the US. During yesterday’s hearing before the House Agriculture Committee, Grewal also urged the US Congress to approve the Digital Asset Market Structure Draft Bill. The bill seeks to provide criteria for determining which digital assets are commodities or securities and to define the authority of the institutions responsible for enforcement.

In addition, Coinbase CEO Brian Armstrong recently encouraged Congress to clarify their position on cryptocurrencies, warning that failure to do so would push innovation outside of the United States.

Meanwhile, the SEC’s recent raid on Binance and Coinbase is seen as its biggest power move. Crypto experts believe that going after two of the biggest crypto institutions is the regulator’s way of bringing the industry into its jurisdiction.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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