Coinbase, the largest US crypto trading platform, has filed a lawsuit against the SEC in a federal court, demanding a clear answer to its petition for crypto regulation.
Coinbase Sues SEC
Coinbase, the largest US crypto trading platform, has filed a lawsuit against the SEC in a federal court, demanding a clear answer to its petition for crypto regulation. The petition, which was submitted in July 2022, asked the SEC to propose and adopt rules to govern the securities that are offered and traded via digital methods. However, Coinbase claims that the SEC has not responded to its petition in a reasonable or timely manner, and has instead pursued a strategy of enforcement actions against crypto businesses.
The lawsuit comes amid a tense standoff between Coinbase and the SEC over the former's plan to launch a lending product that would allow users to earn interest on their crypto assets. The SEC has warned Coinbase that it considers the product to be a security and that it intends to sue the company if it proceeds with the launch. Coinbase argues that the SEC has not provided any clear guidance on why or how its product is a security, and that the agency is trying to regulate crypto through litigation instead of rulemaking.
Coinbase's chief legal officer Paul Grewal said that the company is seeking a "yes or no" response from the SEC to its petition, and that it is not asking the court to decide on the merits of its product or any other crypto issue. He said that Coinbase is frustrated by the lack of clarity and communication from the SEC, and that it wants to work with the regulator to foster innovation and protect investors in the crypto space.