Big news around the Coinbase versus the US Securities and Exchange Commission (SEC) case as the crypto exchange challenges the regulatory agency’s denial of new crypto rulemaking in court.
Here’s what Paul Grewal, Chief Legal Officer at Coinbase, tweeted out, “Today the SEC denied Coinbase’s petition for rules for crypto. After 18 months of silence, we went to court to get the response the law requires. With appreciation for the Third Circuit, later today we’ll again seek its help by challenging the SEC’s abdication of its duty.”
Coinbase had filed a petition to get some clear guidelines from the SEC as to what is a security and what is not.
Grewal highlighted that they had to wait 18 months — that is because the SEC did not even want to respond. But of course, SEC Chairman Gary Gensler does not want to do that — he wants to leave it murky and ambiguous so that he can go around shaking down crypto companies and try to kill many of these startups, and that the TradFi banking folks can come in and take over.
We have been talking about this in the past several months — we see it playing out in parallel. While the crypto industry is being attacked, BlackRock and all of Wall Street are launching crypto services, and filing for Bitcoin Spot ETFs.
Elizabeth Warren, along with JPMorgan Chase CEO Jamie Dimon recently said crypto is being used for nefarious and criminal activities only, yet the world’s wealthiest asset manager is filing for a Bitcoin Spot ETF.
Read: JP Morgan CEO Jamie Dimon: Governments Should Shut Down Bitcoin & Crypto – Details
US SEC’s Misdeeds
We had many different associations and government groups call out the SEC saying what they are doing to many of these companies is unlawful.
For example, Judge Sarah Netburn in the Ripple lawsuit, said that the SEC “lacks faithful allegiance to the law.”
Even in the Grayscale case, the judges said that the SEC acted “arbitrary and capricious.”
We are dealing with bureaucrats who have no regard for the law. They would stab you in the back, lie and be hypocrites. They do not care because they have power, money, and they are supposed to be serving the people. They are supposed to abide by the law and be fair and neutral. But clearly, the SEC has fallen far from its core mission, which is to (1) protect investors, (2) maintain fair, orderly, and efficient markets, and (3) facilitate capital formation.
Read: US SEC Coins New Term For Digital Assets In Its Recent Investor Alert Letter – Details
Coinbase Files Lawsuit Against The SEC
Paul Grewal then tweeted out just right after his previous tweet, saying, “Promise made, promise kept: we are now on file with Third Circuit to challenge the SEC’s arbitrary and capricious denial of our petition for crypto rulemaking. We again appreciate the Court’s consideration.”
Here’s what Brian Armstrong, CEO of Coinbase, also had to say, “Nice small win. We went to court to challenge the SEC’s refusal to create clear rules for the industry – and it worked (a court compelled them to respond).”
He added, “Now that they’ve formally responded (with a no!) we can challenge their response in court, which helps us get one step closer to regulatory clarity. The question is why doesn’t the SEC want to clarify outstanding regulatory questions for the crypto industry?”
Final Thoughts
I do not think Gary Gensler realizes what he is up against here with Coinbase — as a publicly traded company that the SEC greenlighted, knowing Coinbase’s business model and the cryptocurrencies that they sell.
Many of these good actors like Coinbase, Ripple, Grayscale, and so forth, are just trying to abide by the law and get things passed based on the rules and how they are set. But Gary Gensler just wants to throw a wrench in the whole system, screwing up all these crypto companies as much as possible.