U.S. exchange regulator asks court to dismiss Coinbase lawsuit
The SEC considers the crypto-exchanges demands for regulatory clarification to be without merit. The SEC believes that U.S. laws already spell out all the necessary regulations
The U.S. Securities and Exchange Commission (SEC) has asked the court to dismiss Coinbase's lawsuit in which the exchange demands that the regulator responds to a request for new rules regarding the regulation of cryptocurrencies, Bloomberg writes. The agency said it doesn't have to rush to respond to the requests.
The exchange is asking the court to force the regulator to respond to a petition about the need for new rules to regulate the crypto industry. The request has remained unanswered since July 2022.
With no official response from the agency to the petition, Coinbase cannot exercise its right to find out through the courts whether any SEC decisions were correct and formally defend the need for new rules.
At a May 15 court hearing, the SEC filed a motion that Coinbase's claims are without merit and the exchange's court motion should be denied. The document argues that it takes time to review regulatory changes because it is "inevitably complex," and there is no deadline by which the regulator must complete its work.
In its lawsuit, Coinbase is asking the court to order the SEC to respond to whether the petition is accepted or rejected. According to the exchange, more than 1,700 businesses and individuals have already supported the petition.
Over the past few months, Coinbase and a host of other cryptocurrency exchanges have faced SEC enforcement actions, despite the lack of clear rules for the industry.
In late March, Coinbase received a warning from the SEC that the regulator could sue it for possible violations of securities laws. At the same time, the SEC filed a lawsuit against Huobi cryptocurrency exchange executive and TRON blockchain founder Justin Sun, accusing them of unregistered offerings and sales of securities. In April, the regulator sued the Bittrex exchange and its co-founder, former CEO William Sheehar, accusing them of operating an unregistered securities exchange.
Coinbase and Bittrex executives said they had repeatedly filed requests with the SEC over several years trying to figure out how they could bring their businesses into compliance with regulator requirements but had received no answers.
SEC head Gary Gensler says there is no need for additional rules for the cryptocurrency industry.