The XRP community is celebrating the news of cryptocurrency exchange Coinbase filing a lawsuit against the Securities and Exchange Commission (SEC). Coinbase’s suit against the SEC aims to compel the regulatory body to provide a clear yes or no answer to questions relating to the crypto industry’s regulatory guidance.
Coinbase Seeks Regulatory Clarity
In July 2022, Coinbase filed a petition with the SEC requesting the regulator to draft and approve regulatory guidance for the crypto industry. However, the SEC has yet to respond to the petition, prompting Coinbase to take legal action. According to Coinbase’s Chief Legal Officer Paul Grewal, the SEC is required by law to respond to petitions within a reasonable time.
Over 1,700 entities and individuals have submitted comments in support of Coinbase’s petition, echoing the request for clarity. The rulemaking process is intended to help agencies develop regulations with public input and have their positions tested through judicial review.
The Administrative Procedure Act
The Administrative Procedure Act (APA) mandates the SEC to respond to Coinbase’s rulemaking petition within a reasonable time as the company explained in its blog post. If the SEC denies the petition, Coinbase has the right to challenge that decision in court and argue why rulemaking is necessary. Coinbase’s legal action asks the court to prompt the SEC to share its decision.
Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, despite the absence of clear guidelines on how the law applies to their businesses.
The rulemaking process is a critical step in informing the public about permitted and prohibited activities. Coinbase is committed to seeking regulatory clarity and remains open to dialogue with the SEC and other regulators on these issues.
Can Crypto Promote Economic Freedom?
Coinbase says that its mission is to increase economic freedom and opportunity worldwide through the adoption and utility of crypto and blockchain technology. By becoming a public company in the United States, Coinbase aims to contribute to America’s leadership in the technological transformation enabled by blockchain technology. However, disjointed and regulation-by-enforcement approaches at the federal level threaten to hinder American competitiveness and national security.