Delaying Tactic? SEC Asks Court For More Time Over Coinbase's Writ Of Mandamus

The U.S. Securities and Exchange Commission (SEC) on Tuesday asked for more time, at least four months, for it to be able to decide whether to clarify cryptocurrency regulations after the court, last week, gave the agency a seven-day deadline and sought clarity on Coinbase's second request for action.

The Wall Street major regulator told the court in a filing that Coinbase's writ of mandamus "should be denied" and revealed that despite the seven-day deadline, it "has not decided what action to take on Coinbase's rulemaking petition."

"There is no merit to Coinbase's extraordinary request for a writ of mandamus to compel the Commission to act on Coinbase's wide-ranging rulemaking petition within seven days," the financial regulator said.

Lawyers for the financial watchdog also defended why it hasn't come up with a decision on the court's request, noting that it "is entirely reasonable given the breadth of the rulemaking petition and the fact that it was filed just months ago and supplemented by Coinbase more recently."

Moreover, the SEC said, "There is similarly no basis for Coinbase's late-breaking request: while Coinbase might prefer faster action by the Commission, the Commission's ongoing consideration is reasonable under the circumstances." It added that "for all of the reasons discussed in the Commission's response, the mandamus petition should be denied."

The agency also claimed that assertions made by Coinbase, one of the world's largest crypto exchange platforms by trading volume, are "baseless," arguing that the crypto business "erroneously contends that the Commission's enforcement of existing legal requirements, as well as certain statements by the Commission's Chair regarding the application of existing statutes and regulations to crypto assets that are securities, constitute a sub silentio decision to deny Coinbase's rulemaking petition."

The SEC also asked the court for more time to come up with a recommendation, saying, "Commission staff anticipate being able to make a recommendation to the Commission regarding Coinbase's rulemaking petition within the next 120 days."

Coinbase chief legal officer Paul Grewal updated the community Tuesday on the regulator's response to the exchange's repeated calls for regulatory clarity in the nascent industry.

Grewal noted that the financial regulator is repeating "the fallacy that they haven't made any decision on new crypto rules; 2) they refuse to commit to any deadline despite the Court's explicit order; 3) they instead "anticipate" making a "recommendation" in 120 days."

The legal chief also noted that the SEC is ignoring "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."

Coinbase filed the mandamus petition in the court on April 24 to compel the SEC to respond to the petition the crypto business made last July asking the agency to provide guidance for the crypto industry using a formal rulemaking process.

Last Tuesday, the SEC sued Coinbase alleging that it violated the country's securities law.