The US Securities and Exchange Commission (SEC) has stuck to its guns in its long-running quarrel with Nasdaq-listed cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN).
Coinbase is suing the SEC for a response to a rule-making petition submitted by the exchange last July as way to obtain regulatory clarity in its most lucrative jurisdiction.
On Monday, the SEC compelled judges to throw out the complaint, stating that “no statute or regulation requires the commission to take such action on a specific timeline”.
The SEC has previously suggested that existing securities rules are sufficient to regulate cryptocurrency investment products.
Though Coinbase does not expect the SEC to agree to any of its regulatory suggestions, rejecting the petition would allow Coinbase to challenge the SEC through the courts, potentially leading to a favourable outcome.
Coinbase stated that the SEC is required to file a response to the petition “within a reasonable time”, but the regulator seems to disagree.
The agency said: “Deliberating over the kind of significant changes sought by Coinbase, which could affect both crypto assets and the securities markets more generally, takes time- including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance.
“This is particularly true given the Commission’s active regulatory and enforcement agenda in this area.”
Under crypto-sceptic chair Gary Gensler, the SEC has shown little intention to play nicely with Coinbase and the wider cryptocurrency industry, implementing large fines and enforcement actions against what it deems as unregistered securities products.
Over a third of Coinbase’s revenues could be at risk if the SEC decides to ban the exchange’s altcoin trading and staking products, as is speculated to be on the horizon, despite initially giving the company the go-ahead to initiate an IPO in 2021.