The largest US exchange Coinbase has filed a lawsuit against the US Securities and Exchange Commission (SEC) over its silence on a July 2022 petition. In this petition, Coinbase had urged the US securities market regulator to offer regulatory guidance for the cryptocurrency industry through a formal rulemaking process.

Coinbase files a lawsuit against the SEC

The Chief Legal Officer at Coinbase, Paul Grewal, disclosed this lawsuit on Monday saying that the exchange had requested the federal court to ask the securities watchdog to reveal its decision on this petition.

The petition filed by Coinbase last year urged the SEC to formulate and adopt rules that will govern the regulation of securities offered and traded on digital platforms such as cryptocurrency exchanges. Coinbase had also requested the SEC to disclose the potential rules that will help determine the digital assets classified as securities.

In a recent blog post, Coinbase said that the 2022 petition had amassed more than 1,700 submitted comments from individuals and institutions, showing the growing need for regulatory clarity.

In the blog post, Grewal said, “From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet. So the action Coinbase filed today simply asks the court to ask the SEC to share its decision.”

Grewal also accused the SEC and other US regulators of a lack of clarity in distinguishing which crypto assets are securities and which are commodities. The SEC chair, Gary Gensler, has previously said that only Bitcoin qualified to be classified as a commodity.

Uncertain crypto regulatory framework in the US

The SEC has been aggressively cracking down on the crypto industry recently. The recent lawsuit by Coinbase against the SEC comes after the exchange received a Wells notice from the regulator. The Wells notice was in regards to Coinbase offering unregistered securities on its platform in violation of the US securities law.

The SEC also recently sued the Bittrex cryptocurrency exchange, saying it operated a national securities exchange, clearing agency, and broker while violating federal statutes. The SEC also filed charges against the former CEO of the exchange, Bill Shihara.

In February this year, the Kraken crypto exchange was forced to shut down its crypto staking services in the US. The exchange also paid the SEC a $30 million fine to settle charges that it offered unregistered securities on its platform. The SEC alleged that the staking services offered by Kraken posed a risk to investors.

Binance US, the subsidiary of exchange giant Binance, said it will terminate its acquisition deal for Voyager. Voyager was among the crypto firms that filed for bankruptcy last year amid bearish conditions in the crypto market. In a recent Twitter post, Binance US said that its decision to terminate the acquisition deal was prompted by a “hostile and uncertain” regulatory framework in the US.