US SEC Plans To Take Four Months to Coinbase’s Rulemaking Petition

The US Securities and Exchange Commission could take months to decide whether or not to respond to crypto exchange Coinbase’s petition for rulemaking, according to a recent court filing.

The SEC did not seem to be rushing to implement rulemaking for crypto in a court filing responding to Coinbase’s request for the agency to write rules explaining how securities laws apply to crypto. 

Coinbase called on a court to issue a “writ of mandamus” last month, telling the SEC to respond to its rulemaking petition within seven days.

“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 SEC said on Tuesday in the filing. 

The SEC then said it anticipated being able to make a recommendation to the commission in the next four months. 

Enforcement against Coinbase

The SEC’s response to the exchange’s rulemaking petition comes just days after the agency sued Coinbase for not being registered as an exchange, broker or clearing agency. 

The SEC referenced the lawsuit in Tuesday’s court filing, noting that it does not indicate whether the “commission has decided to deny Coinbase’s rulemaking petition.”

“Regardless of whether the Commission determines to undertake the rulemaking sought by Coinbase, a decision the Commission has yet to make, Coinbase—like everyone else—is bound by existing law,” the SEC said. 

Coinbase Chief Legal Officer Paul Grewal criticized the SEC’s response on Twitter, accusing the agency of ignoring statements made by the SEC chair. 

“They ignore 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,” Grewal said.

4) they ignore 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. 3/5

— paulgrewal.eth (@iampaulgrewal) June 13, 2023

SEC Chair Gary Gensler has repeatedly called on crypto exchanges to register and has said that rules governing crypto already exist. 

The agency’s rulemaking agenda for spring 2023 also seemingly does not include distinct plans to write new rules for crypto, though the SEC has proposed other rules that could in part affect crypto.