On Monday, cryptocurrency exchange Coinbase filed a lawsuit against the Securities and Exchange Commission (SEC) in which it demanded that the regulator publicly share its response to a petition from July 2022. The petition asked whether the SEC would allow the crypto industry to be regulated using existing SEC frameworks, specifically those that govern securities offered and traded via digital assets like cryptocurrencies.
The SEC did not publicly respond to Coinbase’s petition, but has recently increased its enforcement actions and warnings against crypto exchanges, including Coinbase. Coinbase’s chief legal officer, Paul Grewal, stated in a blog post that the lawsuit was filed to compel the SEC to share its decision on the petition with the public, as it appeared that the SEC had already decided to deny it.
Since January, the SEC has been cracking down on various crypto-related entities, including Bittrex & Gemini crypto exchanges, Genesis crypto lender, and several individuals accused of manipulating crypto assets such as Justin Sun and Do Kwon. This recent lawsuit from Coinbase is its first official response to the SEC after receiving a Wells notice, indicating pending legal action.
Coinbase’s chief legal officer, Paul Grewal, emphasized the need for regulatory clarity in the crypto industry and expressed concern over potential enforcement actions against crypto companies without clear guidance from the SEC on how the law applies to their business. The SEC has not yet commented on the lawsuit.