Coinbase's Chief Legal Officer Paul Grewal voiced his concerns over the SEC’s regulation on the crypto industry after the agency claimed it will continue to use enforcement as a substitute for lawmaking.
Earlier in April, Coinbase asked the court to force the SEC to respond to its lawmaking petition and provide clarity on crypto policies. Subsequently, the SEC filed a response to Coinbase’s request on May 16.
In the official document, the agency claimed that it is not obligated to respond to Coinbase’s petition, noting,
“Coinbase has identified no such egregious delay warranting the extraordinary relief it seeks from this court. There is no support in precedent for requiring the Commission to act on the timeline Coinbase seeks to impose. The petition should be denied.”
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The SEC highlighted that crypto rulemaking is a complex process that may take many years. In the meantime, the Commission will continue using enforcement to regulate the crypto sector.
Moreover, SEC Chair Gary Gensler recently claimed that the crypto industry has been operating “largely non-compliant” even when “the [crypto] rules have already been published.” However, the SEC's filing said Gensler’s remarks only represent his views, not the agency’s actions.
The SEC acknowledged that it will continue to use enforcement actions as a substitute for rulemaking for the foreseeable future, but not to worry — those enforcement actions may eventually “inform” not-yet-planned rulemaking. 4/7
— paulgrewal.eth (@iampaulgrewal) May 16, 2023
In response, Paul Grewal stated that SEC’s answer on whether it will undertake rulemaking was “a resounding maybe.” The CLO of Coinbase said the SEC’s response was the first time the agency explained its stance on the creation of crypto policies.
Grewal claimed that Coinbase will issue a formal reply to the SEC’s statement next week, adding,
“The SEC’s response reinforces Coinbase’s longstanding concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time.”
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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