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Coinbase officially filed a legal challenge to the US Securities and Exchange Commission’s denial of its rulemaking petition from 2022.
Coinbase Chief Legal Officer Paul Grewal posted on X about the filing, saying, “Promise made, promise kept.”
Grewal called the decision “arbitrary and capricious.”
In its petition for review, Coinbase argued that the SEC’s denial is an “abuse of discretion and contrary to law, in violation of the Administrative Procedure Act.”
“The Commission’s refusal to engage in rulemaking, even while it continues a campaign of regulation by enforcement against Coinbase and others that exceeds its statutory authority, flouts the APA and fundamental principles of fairness it embodies,” Coinbase said.
Read more: Peirce, Uyeda ‘disagree’ with SEC decision to deny Coinbase petition
The July 2022 petition was filed by Coinbase arguing that crypto needs an “updated rulebook” to guide companies, and “crypto assets that are not securities need the certainty of being outside those rules.”
After the SEC didn’t respond to the petition — and Coinbase received a Wells Notice — the exchange took things further and filed a writ of mandamus with the Third Circuit. Coinbase filed its petition for review in the same docket.
Coinbase gave the SEC two requests for action earlier this year, with the SEC declining to give them regulatory clarity.
The SEC also has an open lawsuit against Coinbase. It claims that the company operated as an unregistered exchange while offering and selling unregistered securities. It also targeted its staking product.
SEC Chair Gary Gensler said on Friday that he agreed with the SEC’s decision to deny Coinbase’s rulemaking petition.
“The Commission and its staff are currently pursuing numerous undertakings applicable to crypto asset securities and intermediaries, and the Commission’s assessment of whether and, if so, how to alter the existing regulatory regime may be informed by the results of these initiatives,” he said.
Coinbase’s Grewal said, “no one looking fairly at our industry thinks the law is clear or that there isn’t more work to do.”