Coinbase Asks for Court to Force SEC Response to 2022 Rulemaking Petition

Crypto exchange Coinbase (COIN) has asked a federal court to force the U.S. Securities and Exchange Commission (SEC) to respond to a petition it filed last year asking for formal rulemaking within the digital assets sector.

Coinbase filed an Administrative Procedure Act challenge against the U.S. Securities and Exchange Commission Monday, asking the Third Circuit Court of Appeals to order the SEC to provide “regulatory clarity” around how existing securities laws might apply to the digital asset sector.

The SEC warned Coinbase it expected to sue the exchange over allegations of listing and offering unregistered securities products last month. Coinbase is expected to respond to the specific allegations by the end of April.

Monday’s filing, however, is a preemptive move by Coinbase to argue that the SEC’s approach doesn’t provide sufficient regulatory guidance for U.S. companies operating in the crypto sector.

“It is widely recognized – including by a sitting SEC Commissioner – that existing SEC registration and disclosure requirements are incompatible with digital assets, which differ fundamentally from the stocks, bonds, and investment contracts for which the securities laws were designed and that the SEC traditionally has regulated. The SEC at a minimum must set forth how those inapt and inapposite requirements are to be adapted to digital assets. But the SEC has refused to do even that,” the filing said.