Coinbase Sues SEC, Demands Answers Regarding Months-Old Petition

Coinbase is a very large organization. As one of the biggest digital currency trading platforms out there, it didn’t reach its present size and scope by sitting around doing nothing, and now, the company is taking even further action by filing a lawsuit against the Securities and Exchange Commission (SEC) and fighting against the ongoing oppression of the agency.

Coinbase Retaliates Against the SEC

The SEC has been particularly nasty to Coinbase, recently going so far as to send it a Wells notice. Such a notice does not mean that the receiving company has been charged with a crime. Rather, it hints they should prepare from a legal standpoint given that the enterprise is likely to be charged soon, though it also doesn’t say what the company has been accused of.

Coinbase said it was very surprised by the Wells notice given that it has allegedly met with SEC regulators several times over the past nine years to ensure it was always compliant and in good graces with those in charge. Nevertheless, it appears the exchange is tired of sitting around waiting for the agency to get its act together. It’s also tired of the ongoing bullying, and it wants to show that it cannot be pushed around or abused any longer.

The trading platform filed a petition many months prior. The petition asked SEC regulators for answers regarding how it was they justified applying decision-making processes regarding traditional monetary markets to the crypto arena. Those at the SEC never answered, and now, Coinbase is suing to get the information it has waited so patiently for. In a recent blog post, Paul Grewal – the company’s chief legal officer – said:

From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition, but they haven’t told the public yet, so the action Coinbase filed today simply asks the court to ask the SEC to share its decision. Coinbase does not take any litigation lightly, especially when it relates to one of our regulators. Regulatory clarity is overdue for our industry, yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, even though we have not been told how the SEC believes the law applies to our business.

He continued with:

The rulemaking process exists so that agencies can develop regulation with the benefit of public input and have their position[s] tested through judicial review. To date, more than 1,700 entities and individuals have submitted comments to Coinbase’s petition echoing the request for clarity.

Why You Gotta Be So Mean?

The SEC has long served as the biggest anti-crypto body out there.

Not long ago, the agency went after Kraken and forced it to part with $30 million in penalty fees.

Nick Marinoff
Nick Marinoff
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.


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