Benzinga - The U.S. Securities and Exchange Commission (SEC) has been mandated by the U.S. Court of Appeals for the Third Circuit to clarify its stance on a rulemaking appeal initiated by cryptocurrency exchange, Coinbase Global Inc (NASDAQ: COIN).
This petition, which was submitted in 2022, is directed at the SEC's rulemaking in the digital asset sector and was instigated in an effort to address the perceived inadequacy of the existing regulations for digital assets.
The SEC now has a week to either reject Coinbase's petition and provide justifications for such a decision, or provide an estimated timeline for their final decision on this matter.
Coinbase has positioned this request as a necessary precursor to any enforcement actions, insisting on the establishment of explicit rules prior to enforcing regulatory measures.
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"We petitioned the SEC for rulemaking almost a year ago precisely because legislation and rulemaking must precede enforcement actions," said Paul Grewal, the chief legal officer of Coinbase, in a series of tweets.
This ongoing litigation occurs amid an SEC lawsuit against Coinbase, accusing the crypto exchange of operating an unregistered securities exchange.
Grewal believes that the SEC's legal action against the crypto industry, including the recent case against Coinbase, would not have occurred if the SEC had not already decided to reject their rulemaking appeal.
The SEC is also required to clarify why the court should not maintain oversight of the case and why the SEC should not be obliged to provide Coinbase with regular rulemaking updates, as requested by the cryptocurrency exchange.
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