- US Third Circuit Court sets a 10-day deadline for the SEC to respond to Coinbase’s rulemaking petition.
- Coinbase seeks clarification on digital assets classification as securities and applicable regulations.
The US Third Circuit Court has granted Coinbase’s request for a response from the Securities and Exchange Commission (SEC) regarding its rulemaking petition, giving the agency a strict 10-day deadline. Coinbase initially filed a petition in July 2022, urging the SEC to establish clear rules on digital assets classification as securities and the application of securities laws.
The leading cryptocurrency exchange argues that the US lacks a practical and well-defined framework to ensure seamless operation of the crypto market. According to Coinbase, the SEC has not addressed their petition, which they find unreasonable given the agency’s size of over 4,500 employees.
The court’s recent ruling may finally compel the SEC to respond. A text-only order issued on Wednesday directs the SEC to file an answer to the petition within ten days. The SEC has declined to comment on the matter. Paul Grewal, Coinbase’s Chief Legal Officer, expressed his appreciation for the court’s thorough examination of the issue on Twitter.
Coinbase is not alone in its quest for clarity from the SEC. The agency has consistently failed to provide clear guidance on digital asset classification as securities despite numerous requests from the industry and policymakers. SEC Chair Gary Gensler’s stance that “everything else other than bitcoin is a security” has not been codified in regulations. Instead, Gensler has encouraged developers and platforms to register or face enforcement actions.
In conclusion, the US Third Circuit Court’s decision to grant Coinbase a 10-day deadline for the SEC to respond to their rulemaking petition signifies an important step towards much-needed regulatory clarity in the crypto industry. With the ongoing ambiguity surrounding the classification of digital assets as securities and applicable regulations, the court’s intervention may prompt the SEC to address the concerns of both Coinbase and other industry stakeholders. Establishing a clear and practical framework for the crypto market will be crucial for fostering innovation, growth, and investor protection in this rapidly evolving financial landscape.
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