Coinbase Files Closing Brief, Blasts SEC Over Unclear Regulation

Coinbase has made a bold move in its ongoing clash with the SEC, filing its closing brief in the Third Circuit Court. This pivotal legal battle hinges on a single, dismissive sentence in the SEC’s order that merely “disagreed” with Coinbase’s claim that current regulations are impractical for crypto companies. But Coinbase isn’t backing down.

Here’s the story.

Understanding the Core Issue

Coinbase argues that this lack of reasoning and detail is enough to dismiss the entire case. The SEC has made a habit of overreach, claiming broad jurisdiction without clear authorization from Congress and refusing to provide clear rules.

Paul Grewal, Coinbase’s chief legal officer, criticized the SEC’s accusations and operations as senseless. In the filing, Coinbase describes a Catch-22 scenario: the SEC demands compliance based on an overly broad interpretation of its authority, aggressively litigates against crypto companies that fail to comply, and then refuses to establish the rules that would make compliance possible.

Allegations Continue to Fly

Coinbase claims that the SEC’s actions seem like a deliberate attempt to dismantle the entire crypto industry by imposing unattainable demands and punishing firms that cannot meet them.

The brief further accuses the SEC of using inconsistent and unsupported legal arguments to sustain its campaign against the industry.

The Need for a Court-Mandated Rulemaking

Coinbase’s filing asserts that without a court order mandating rulemaking, the SEC will continue its arbitrary and oppressive actions. Despite repeated industry requests for clear regulations, the SEC has refused to provide the necessary rules, making compliance with federal laws impossible.

Coinbase insists that a court directive is essential to stop the SEC’s arbitrary actions. The company filed its rulemaking petition nearly two years ago, but the SEC has tried to sideline it through inaction. It took a mandamus petition, court orders, and the threat of an extraordinary writ to compel the SEC to issue even a cursory denial order.

Will the SEC finally be forced to play by the rules? The future of crypto hinges on this pivotal legal battle.

Also Read: Grayscale Offloads Ethereum to Cover Fees: What’s Behind the Move?