House Majority Whip Tom Emmer has criticized the U.S. Securities and Exchange Commission (SEC) for its refusal to provide clarity to the cryptocurrency industry, following the denial of Coinbase's petition for rulemaking on December 15. Coinbase, recognized as the largest crypto exchange in the United States, initially filed this petition in July 2022.
Emmer expressed his disapproval of the SEC's approach, stating: "The SEC’s policy to provide less clarity to the marketplace instead of more is designed to create chaos and it will corrupt our great capital markets. It is wrong and a clear violation of the SEC’s mandate."
Coinbase Chief Legal Officer Paul Grewal elaborated on the company's request in a blog post published on their website in April. The petition implored the SEC to utilize its official rulemaking process to offer guidance to the crypto industry. On April 24, Coinbase requested a federal court to compel the SEC to respond to their petition.
Grewal highlighted in his post that "Regulatory clarity is overdue for our industry." He added that "Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, even though we have not been told how the SEC believes the law applies to our business. The rulemaking process is a critical step to giving the public notice about what activities they can and cannot engage in. So until the crypto industry gets that clarity, we will continue to take every step available to us to seek it, which includes today’s filing. We also remain available to the SEC and all of our regulators for dialogue any time on these issues."
Following the denial of their petition by the SEC on December 15, Coinbase CEO Brian Armstrong announced via a post that they would appeal this decision in court. Armstrong believes this move will bring them "one step closer to regulatory clarity." He further questioned why the SEC is reluctant to clarify outstanding regulatory issues for the crypto industry.
Two SEC Commissioners, Hester Peirce and Mark Uyeda, voted against the decision to deny Coinbase's rulemaking petition. According to their statement of dissent, they argued that "the petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator."
Emmer, an attorney elected to Congress in 2015, according to his website, serves as a member of the House Financial Services Committee.
