3 - 4 minute read
The U.S. Securities and Exchange Commission (SEC) is currently considering Coinbase’s request for rulemaking, and its enforcement action against the popular crypto trading platform is not contradictory to any decision on rulemaking, according to a statement by the regulator on Tuesday. The SEC’s statement was in response to a court order that asked the agency how it was currently approaching the rulemaking petition in light of the enforcement action against Coinbase.
Coinbase was sued by the SEC last week over allegations that it was operating an unregistered securities exchange, broker, and clearing agency. Coinbase has argued that the SEC has already decided to reject the petition, but the regulator said Tuesday that it has not made any decision on the matter yet. However, agency staff think they will make a recommendation within the next 120 days.
The SEC’s current enforcement action means that, until and unless the regulator decides to propose new rules, Coinbase still has to abide by existing laws. In discussing its current enforcement action, the regulator said that “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.”
Coinbase’s Chief Legal Officer Paul Grewal took to Twitter to express his frustration with the SEC’s statement. He accused the regulator of “ignoring 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.” However, the SEC argued that “statements by the Chair do not – and could not – constitute Commission action denying Coinbase’s rulemaking petition.”
The SEC’s decision, whenever it comes, will need a majority of a quorum vote. For now, traders should be aware that Coinbase’s current enforcement action means that the platform has to adhere to existing laws. If the SEC does eventually propose new rules, traders should be prepared to adjust their strategies accordingly.
The Bottom Line: The SEC’s statement regarding Coinbase’s rulemaking petition and enforcement action has left traders uncertain about the future of the popular crypto trading platform. Until the regulator decides to propose new rules, Coinbase must abide by existing laws. Traders should keep an eye on any updates from the SEC and be prepared to adjust their strategies accordingly.
