- The SEC has indicated that it will continue using enforcement actions instead of engaging in rulemaking.
- The regulator also asked the crypto industry to not regard Chair Gensler’s public statements as policy statements.
The U.S. Securities and Exchange Commission (SEC) has responded to the petition for a writ of mandamus filed by Coinbase last month. Coinbase’s Chief Legal Officer has stated that the regulator’s response wasn’t optimistic about the repeated calls for rulemaking and clear regulations for the crypto industry.
Coinbase had asked the SEC in July last year to propose and adopt rules to govern the regulation of crypto assets and potential securities. After no response from the securities regulator for nearly 10 months, Coinbase followed up on the pending application by filing the mandamus petition, which compelled the SEC to answer “yes” or “no” to the exchange’s request.
Paul Grewal, Coinbase’s Chief Legal Officer, shared the SEC’s response on Twitter earlier today. Speaking on the regulator’s “yes” or “no” answer to the pending application for rulemaking, Grewal revealed that the response was a “resounding maybe”. However, he noted that for the first time, the SEC had clarified its stance in court.
According to Grewal’s summary of the SEC’s response, developing comprehensive regulations for the crypto industry is a lengthy process and the securities regulator is in no hurry to finish the job. The SEC also indicated that it would continue engaging in enforcement actions as a substitute for rulemaking. However, the regulator stated that information gathered from such actions will aid in the rulemaking process.
The SEC has also advised stakeholders in the crypto industry to not see Chairman Gary Gensler’s public statements as formal guidance or policy statements from the Commission. According to Grewal, “The SEC’s response reinforces Coinbase’s long-standing concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time.”
Crypto lawyer Jeremy Hogan is looking at the latest development from a different perspective. According to Hogan, the mandamus petition was never meant to extract a definitive answer from the SEC. Instead, it will serve as evidence of the regulator’s controversial stance on crypto regulation.