How the tables have turned.

What's It Gonna Be?

Publicly traded cryptocurrency exchange Coinbase has filed a lawsuit against the Securities and Exchange Commission (SEC), CNBC reports.

With its suit, Coinbase is urging the regulatory arm to publicize its response to a separate petition, which it filed back in July 2022, requesting the SEC to "propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods."

According to the filing, the SEC has been silent on the July petition — and Coinbase wants the regulator to inform the public of its response.

"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," Coinbase's chief legal officer, Paul Grewal, wrote in a company blog post. "But they haven't told the public yet."

"So the action Coinbase filed today," Grewal added, "simply asks the court to ask the SEC to share its decision."

It's an unusual reversal of roles. Coinbase's petition comes around a month after the exchange was warned by the SEC that securities charges may be pending, meaning that Coinbase could soon be facing enforcement action itself.

Breaking Rules That Don't Exist

The whole affair is pretty messy. As of right now, cryptocurrencies are largely unregulated, and while the industry's Wild West nature has led to plenty of chaos, some fear that regulation might do more harm than good.

Clarity from the SEC on the topic of crypto regulation could offer a highly volatile market some much-needed groundedness.

For its part, Coinbase says that it's taking the SEC's litigation threats seriously. But if you don't tell them what exactly about their business is legally questionable, how are they supposed to know what's right or wrong?

"Coinbase does not take any litigation lightly, especially when it relates to one of our regulators," Grewal wrote in the blog post. "Regulatory clarity is overdue for our industry."

And that kind of uncertainty has locked exchanges and regulators in a stalemate.

"Yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC," he added, "even though we have not been told how the SEC believes the law applies to our business."

READ MORE: Coinbase sues SEC after months of silence from federal regulator [CNBC]

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