Paul Grewal, the Chief Legal Officer at Coinbase, revealed that they were planning to take the US Securities and Exchange Commission (SEC) to court once more.
This time, they plan on doing so to challenge the denial of the regulator of the rulemaking petition that the exchange had submitted.
The denial
Coinbase had submitted a petition demanding that the SEC provide clarity in terms of crypto rules applicable to the digital assets industry.
The petition had been filed by the biggest crypto exchange in the US last year and it had asked the Commission to propose and implement new rules for regulating the digital native securities.
The SEC had continued to drag its heels when responding to the petition. Therefore, Coinbase reached out to a court in April to get the top regulator to respond.
The regulatory body finally responded to the petition and turned it down. In a statement on Friday, Gary Gensler, the chairman of the SEC, said that the existing securities law governs crypto-asset securities appropriately.
This prompted Grewal to take to X and explain that the company is planning on challenging this denial by the Commission.
The response
He tweeted that they had waited 18 months for a response and had then gone to court to get the regulator to respond.
He appreciated the Third Circuit and said that they would seek its help once more in challenging the regulatory agency for abdicating its duty.
Grewal also asserted that anyone who looks at the crypto industry fairly can claim that the law is clear, or that more work is unnecessary.
There have been continuous clashes between the SEC and Coinbase regarding crypto regulation in the biggest economy in the world.
The arguments
Based in San Francisco, Coinbase claims that the SEC has not given any clarity regarding the rules applicable to the crypto asset industry.
The SEC, on the other hand, has alleged that unregistered securities have been sold on Coinbase and even filed a massive lawsuit against the company back in June.
There is one main argument that needs to be settled; whether some crypto tokens are securities or not. The lawsuit that the SEC has filed against Coinbase names several tokens as unregistered securities.
These include Solana, Polygon, and Cardano. Gensler has asserted repeatedly that most digital tokens and coins, except Bitcoin, are likely unregistered securities.
This means that exchanges that offer these tokens could become a target of legal action from the regulatory body.
Last month, the SEC filed another lawsuit against crypto exchange Kraken and it mirrors the complaint it has made in its lawsuit with Coinbase.
However, not all SEC members are happy with the Commission’s denial of Coinbase’s petition, including Mark T. Uyeda and Hester Pierce.
They said in a statement that they were disappointed that the agency was not willing to have important conversations regarding what can be considered securities.