Coinbase Rulemaking Request Still Under SEC Scrutiny, No Resolution In Sight

The U.S. Securities and Exchange Commission (SEC) clarified on Tuesday that it has not yet reached a resolution on Coinbase Global Inc's (NASDAQ: COIN) request for rulemaking.

The statement was made in response to a court order inquiring about the regulator's stance on Coinbase's petition amid the SEC’s enforcement actions against the cryptocurrency exchange.

Just a week earlier, the SEC filed a lawsuit against Coinbase, alleging that the platform was functioning as an unregistered securities exchange, broker, and clearing agency.

Coinbase, however, contested the allegations and maintained that the SEC had implicitly declined their petition for rulemaking.

In its clarification, the SEC emphasized that no decision has been made yet on Coinbase's request, but they expect the agency staff to possibly make a recommendation within the next 120 days.

The regulator also stressed that regardless of the outcome of Coinbase’s rulemaking petition, the company is still obligated to comply with the existing laws.

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"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," read the SEC's document.

It further stated, "Coinbase is free to vigorously assert its position that it has not violated that law in the current enforcement action."

Coinbase's Chief Legal Officer, Paul Grewal, took to Twitter to express his frustration, claiming that the SEC disregarded clear remarks by its Chair, who, according to Grewal, confirmed that they had no intention of creating new rules.

However, the SEC countered by stating that "statements by the Chair do not – and could not – constitute Commission action denying Coinbase’s rulemaking petition."

Moreover, the SEC highlighted that any decision regarding Coinbase’s petition would necessitate a majority approval from a quorum vote.

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