SEC delays its recommendation on Coinbase petition

• The SEC added that until and unless it decides to propose new guidelines, Coinbase must follow current law.
• It was only last week that the agency charged Coinbase and Binance with securities violations.

The U.S. Securities and Exchange Commission (SEC) said it hasn’t made a decision on Coinbase’s rulemaking petition yet. However, its staff members think that it will make a recommendation within 120 days, i.e. four months.

The regulator made these remarks while responding to a court order on whether it was taking any action on rulemaking as asked in Coinbase’s petition filed earlier, even as it was suing the crypto exchange for securities violations.

Coinbase alleged in the court that the SEC has decided to reject the petition. The SEC said that this was not the case, though it thinks that it will make a recommendation within a period of 120 days.

The agency also stated that its enforcement action against the crypto trading platform was not in conflict with any regulation decision. Until and unless the SEC decides to propose new guidelines, Coinbase must follow current law, according to the enforcement agency.

SEC further added that,

“Coinbase is free to vigorously assert its position that it has not violated that law in the current enforcement action.”

Coinbase’s legal officer frustrated with the SEC

Coinbase Chief Legal Officer Paul Grewal expressed his frustration with the SEC on a Twitter thread.  He said the SEC has failed to give a deadline despite an explicit order from the court.

He further wrote,

“They (SEC) ignore the clear statements of the Chair that confirm they have no intent to issue new rules, and instead conflate the evidence of a decision those statements provide with an argument that the statements are themselves a decision.”

On the other hand, the SEC argued that “statements by the Chair do not – and could not – constitute Commission action denying Coinbase’s rulemaking petition.”

Any SEC decision would also need a majority of a quorum vote, the regulator argued.

The SEC charged Coinbase last week, alleging that it was operating as an unregistered securities exchange, broker and clearing agency. A day before its action against Coinbase, SEC charged Binance, world’s leading crypto exchange, with similar allegations.