Coinbase has initiated legal action against the United States Securities and Exchange Commission (SEC) in an effort to force the government agency to respond to a petition requesting new regulations for cryptocurrencies.
With an initial pending petition which was filed in July 2022 requesting that the SEC issue regulations for the cryptocurrency industry through its established rulemaking procedures, Coinbase believes that the SEC’s refusal to reply to the petition constitutes a violation of both the Administrative Procedure Act and the company’s constitutional rights to due process and equal protection under the law.
This comes at a time when the crypto industry is facing heightened scrutiny from authorities all over the world. The Securities and Exchange Commission (SEC) has been particularly stringent in recent months, cracking down on cryptocurrency exchanges and other companies that it believes are breaching securities laws by offering unregistered securities.
The firm is looking for further information regarding the regulations that the SEC is using as a benchmark. They stated that they do not take any litigation lightly, especially when it involves regulators. They believe that the crypto sector is in dire need of more defined regulations. Despite not knowing how the SEC interprets the law with regard to their operation, they fear that the SEC may take regulatory enforcement proceedings against Coinbase and other crypto companies.
In earlier reports, it was learnt that Coinbase is considering moving out of the United States owing to the environmental factors as regards policies that they deem irritable to the crypto sector
The outcome of this lawsuit might have tremendous effects on the cryptocurrency sector as a whole, as it could serve as a model for how various governments around the world regulate cryptocurrencies in the future and also how several firms can interact with policies in the space