After receiving SEC's response, Coinbase will have seven days to reply to the securities regulator.
The ongoing legal struggle between Coinbase and the US Securities and Exchange Commission (SEC) has advanced, with the Third Circuit demanding the SEC to respond to Coinbase's complaint concerning the need for transparent crypto trading rules within ten days.
The news about the development was revealed by Coinbase's chief legal officer Paul Grewal on May 3rd.
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Grewal shared that the court issued a text-only order instructing the SEC to address Coinbase's writ of mandamus—a court order directing a lower government official to fulfill their duties correctly—within the given timeframe.
The court also granted Coinbase permission to file a reply to the SEC's response in seven days after its submission, and Grewal expressed his gratitude for the court's in-depth examination of the case.
As the largest cryptocurrency exchange in the US, Coinbase filed a lawsuit in April, urging the court to force the SEC to reveal its stance on a previously submitted petition that included 50 specific inquiries about the regulatory treatment of particular digital assets. These questions encompassed a variety of topics, such as token classification as securities and clarification on several other issues.
Although the SEC has not publicly responded to the petition, it has increased enforcement actions and issued warnings to crypto exchanges. It has even sent a Wells Notice to Coinbase over a potential violation of securities laws.
Following Coinbase's regulatory struggles, US investment bank Citi downgraded Coinbase's shares from "buy" to "neutral" and lowered its price target, citing "too many unknowns" as the reason. Citi analyst Peter Christiansen stated that the downgrade would remain in place until the US establishes clearer regulatory "rules of the road."
However, this didn't stop Cathie Wood's ARK Invest from purchasing Coinbase shares. On May 1st, the company purchased around $8.5 million worth of Coinbase stocks.
