Coinbase has initiated legal action against the SEC, with the intention of urging the securities regulator to provide regulatory clarity for the cryptocurrency industry. The US-based cryptocurrency exchange has requested a federal court to compel the SEC to respond to its previous rulemaking petition in a period of seven days.
Coinbase had, in July 2020, requested that the SEC come up with rules to identify which digital assets qualify as securities and how securities laws can be made applicable to digital assets, citing the lack of a clear and feasible regulatory mechanism in the United States.
In March 2021, the exchange had also sought clarity on the treatment of staking services, but has allegedly not received a response from the SEC. The exchange has not sought an instruction from the Court to direct the SEC’s response, but rather, a court order directing the SEC to respond at all. While the SEC had published a framework in 2019 to integrate digital assets with investment contracts and securities laws, the broader US cryptocurrency sector has found it to be unsatisfactory.