Last week, Coinbase launched its first counteroffensive against the Securities Exchange Commission’s (“SEC”) aggressive enforcement posturing in the cryptoeconomy. The cryptocurrency trading platform filed a petition for writ of mandamus asking the Third Circuit to make the SEC act on its petition for rulemaking. The filing raises important questions about administrative power in several respects including agency nullification of the Administrative Procedure Act (“APA”).
First, petitions for mandamus requesting an agency to act on rulemaking petitions are rare, possibly nonexistent until now. Second, Coinbase, having recently received a “Wells notice,” is under threat of enforcement by the SEC. Third, the petition does not push a particular outcome beyond getting the Commission to take an action, any action, that is final and appealable under the APA section 704. Fourth, it articulates a theory of “unreasonably delayed” that the courts have not addressed when reviewing agency inaction regarding rulemaking petitions, i.e., that the unreasonable delay inquiry is relative.
But Coinbase’s petition also misses a critical issue—that SEC’s lassitude is the rule not the exception.
Source: Have the SEC’s Delay Tactics Made Its Petition for Rulemaking Process Vulnerable to Challenge? A Look at In re Coinbase Inc. and SEC’s Nullification of 5 U.S.C. § 553(e) by Inaction – Yale Journal on Regulation