Coinbase has filed a writ of mandamus in federal court, marking a dramatic escalation in the ongoing confrontation between the crypto sector and the Securities and Exchange Commission (SEC).
The infrequently used legal strategy effectively asks a court to order a party to carry out its statutory obligations.
In this scenario, Coinbase is using a writ to force the SEC to establish uniform guidelines for digital currencies. Since getting a writ of mandamus usually entails overcoming significant legal difficulties, this daring approach signals a last-ditch attempt.
The SEC shot back saying it wasn’t within its scope to regulate cryptocurrencies. The mission of the SEC is to ensure that markets are open, orderly, and efficient. Even so, it has been hazy on the important matter of regulatory clarity as to whether or not it considers cryptocurrencies to be securities.
The SEC said that Chairman Gary Gensler’s remarks in reaction to Coinbase’s actions did not represent the Commission’s position.
According to Coinbase and others, the SEC’s lack of transparency and subsequent enforcement efforts have contributed to the market’s instability and unfairness. Supreme Court precedent suggests a lack of discretion when agencies fail to offer clear regulatory standards and substitute enforcement for rulemaking.
The SEC has verified that rulemaking is underway but has provided no ETA. Legal experts think that Coinbase’s motion may be premature, despite the fact that a ruling on the mandamus case might take years.