Coinbase Criticizes SEC for Lack of Transparency After Court Order

Coinbase, a prominent cryptocurrency exchange, has criticized the United States Securities and Exchange Commission (SEC) for failing to provide clear answers in response to questions posed by the U.S. Court of Appeals regarding their ongoing legal dispute. In a letter filed on June 17, Coinbase’s lawyers accused the SEC of evading their rulemaking petition, which urges the regulatory agency to establish a comprehensive regulatory framework for digital assets.

The letter highlighted Coinbase’s frustration with the SEC’s repeated failure to address the inconsistencies between its litigating stance and its actions and statements elsewhere. Coinbase’s legal team expressed disappointment, stating, “the SEC still offers no straight answers and instead repeats its talking points.”

This letter came as a response to the SEC’s submission on June 13, requesting an additional 120 days to respond to Coinbase’s rulemaking petition. Coinbase argued that the SEC is reluctant to provide updates on its decision-making process, noting that the agency even objects to court orders requiring them to keep the Court informed of their progress.

Coinbase emphasized that the SEC’s continued silence, prolonged delays, and enforcement actions have a detrimental impact on the cryptocurrency industry. The exchange accused SEC Chair Gary Gensler of leading the agency down a path that could irreparably damage both a U.S. public company and an entire industry.

Paul Grewal, Coinbase’s Chief Legal Officer, took to Twitter on June 17 to express his concern, stating that it is unusual for the government to defy direct questions from a federal court. Grewal expressed hope that the court would grant a writ of mandamus, a court order directing a government official to fulfill their official duties under the law, given the SEC’s rejection of Coinbase’s petition.

Coinbase has requested that the court set a deadline of 60 days or less, starting from June 13, instead of granting the SEC’s request for an additional 120 days to respond.

In a separate case, the SEC sued Coinbase on June 6, alleging that the exchange violated various securities rules, particularly by offering cryptocurrencies that the regulator considers to be unregistered securities.

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