The United States Court of Appeals for the Third Circuit on Thursday ordered the Securities and Exchange Commission to respond to Coinbase’s filing for clearer regulatory rules in the state.
According to a tweet by Coinbase chief legal officer Paul Grewal, the court gave the SEC ten days to respond to the petition brought forward by the crypto exchange. The order also noted that the petitioner, Coinbase, may reply to the filing by the US regulator within seven days.
The latest twist in the legal battle is a much-needed development for Coinbase in its push for well-defined crypto regulation in the US. Citing the Administrative Procedure Act, the exchange sued the SEC and pleaded with the court to force the regulator to respond to its petition late last month.
Court Sent Text-Only Order
Grewal stated that the SEC received a text-only order from the appeals court prompting it to respond to the petition for rulemaking. Coinbase filed a petition ten months ago with the SEC requesting that it clarify certain crypto regulatory laws it has imposed on exchanges in the country. The crypto firm asked the regulator 50 specific questions, including criteria for classifying digital assets as securities and other related topics, which, according to it, would address the unclarity in regulation in the US if answered.
According to Grewal, the court addressed the petition sent by the exchange as a writ of mandamus. A writ of mandamus is a legal order sent to a lower government official requesting that it meet its required obligations adequately.
A Game-Changing Move?
The SEC has been on the firing line recently as it has imposed unclear crypto regulations on exchanges in the US. The regulator has cracked down on crypto staking services and has classified some digital assets as securities.
It is rare to sue a regulator or order it to perform a particular task. Hence, the move made by Coinbase would encourage a few other exchanges to engage in and expect a positive response from a legal battle with the SEC and other regulators.
