The battle between cryptocurrency exchange Coinbase and the US Securities and Exchange Commission (SEC) continues.
The latest twist came on Monday when the SEC sought an injunction to block Coinbase’s request for the agency to clarify its stance on cryptocurrency regulation.
The exchange publicly voiced its complaints against the US financial watchdog on April 27, also revealing that it had initiated legal proceedings.
Central to their argument was the SEC’s failure to respond to a petition filed in July 2022. The petition urged the SEC to clarify whether the current regulatory framework for securities should be extended to the cryptocurrency industry.
Coinbase asked a federal judge to force it to respond to the regulator.
The company’s chief legal officer Paul Grewal expressed the company’s frustration in a Twitter thread last month.
“Coinbase does not take any litigation lightly, especially when it involves one of our regulators,” he wrote. “However, we, like other companies in the industry, face potential punitive action from the SEC without further clarification of how the SEC interprets the law with respect to our business.”
The SEC finally responded on Monday, rejecting Coinbase’s request in its entirety.
“Coinbase’s preference for expedited or separate regulatory action by the Commission does not merit extraordinary relief from this court,” attorneys for the commission wrote in the filing. “The petition should be denied.”
In response to the SEC statement, Grewal commented that it is “the first time the SEC has transparently communicated its position on standard-setting for the cryptocurrency industry.”
He also expressed frustration over the implementation timeline of the SEC rules and their apparent lack of urgency.
Grewal further added that the SEC’s response “reinforces Coinbase’s long-standing concern that our industry is unclear about what the SEC may consider to be inside or outside its jurisdiction at any given time, and May keep changing his mind.” On th eway ” .
He concluded by announcing that Coinbase plans to officially respond to the SEC next week.
Coinbase vs SEC
The incident adds a new chapter in the ongoing conflict between Coinbase and the SEC, which escalated in March when Coinbase received a notice of Wells from the SEC.
This formal warning signaled the SEC’s intention to take legal action against Coinbase.
The friction between Coinbase and the SEC can be traced back to 2021, when the SEC first warned it would sue the company over plans to launch a lending product. The platform eventually shut down the product due to threats of legal action.
Coinbase CEO Brian Armstrong has consistently criticized the lack of regulatory clarity, even suggesting that he may move the company out of the United States in a few years in the absence of a clear position from the SEC.