Privacy wins. Today the Fifth Circuit held that @USTreasury’s sanctions against Tornado Cash smart contracts are unlawful. This is a historic win for crypto and all who cares about defending liberty. @coinbase is proud to have helped lead this important challenge. 1/6 These smart contracts must now be removed from the sanctions list and US persons will once again be allowed to use this privacy-protecting protocol. Put another way, the government’s overreach will not stand. 2/6

Chevron: gone. Secondary sales in the Binance case: gone (more to say about that...). And now, late on a Friday, more stonewalling from @SECGov to stop Coinbase from obtaining documents from Gary Gensler in our litigation. 🧵⬇️ As background, in March 2021, Mr. Gensler told Congress that the SEC lacked regulatory authority over digital asset exchanges, confirming market participants’ longstanding view that transactions in digital assets traded on such exchanges fell outside the securities laws.

We just filed our reply in our request to file an interlocutory appeal with the 2nd Circuit. Unlike @SECGov, @coinbase’s position remains the same: To push for clarity for our industry and the 52 million Americans who own crypto, and against the SEC’s overreach beyond the authority it’s been given from Congress. 1/5 The core question we’re asking to appeal is whether the SEC may regulate as “investment contracts” digital asset transactions that don’t involve anything contractual. And we’re not the only ones who think this question deserves an interlocutory appeal. The SEC itself, in its request for the same relief in the Ripple case, acknowledged that this question has “industry-wide significance,” and noted that there are “substantial grounds for difference of opinion.” 2/5

Today, the Court decided that our SEC case will move forward on most of the claims, but dismissed the claims against Coinbase Wallet. We were prepared for this, and we look forward to uncovering more about the SEC’s internal views and discussions on crypto regulation. 1/6 Early motions like ours against a government agency are almost always denied. But clarity is the ultimate goal and today’s decision continues us on that path. 2/6

Sigh... again with the ETH misinformation as we await a decision on ETH ETPs. Ok--let’s talk about some basic facts about Ethereum. Millions of Americans hold ETH; it has been vital to crypto since its 2015 launch; and ETH is a commodity, not a security. 1/10 The SEC has taken this position for years. 2/10

Today @coinbase filed our opening brief in the Third Circuit challenging the SEC’s denial of our rulemaking petition. Tl;dr: the SEC’s denial is arbitrary and capricious, an abuse of discretion, and a violation of the Administrative Procedures Act. 1/7 assets.ctfassets.net/c5bd0wqjc7v0/4… If you go back and read the SEC’s perfunctory denial, you’ll be hard pressed to find an actual reason for its inaction. This is despite the dozens of legitimate concerns we raised in our petition, including questioning the SEC's authority over the digital asset space. 2/7

I don’t think much of it at all. Here’s why. 1/6

https://twitter.com/tp8815/status/1764426758030254492

Default judgments aren’t contested. The whole point is that the defendant didn’t show up from his hideout in India or wherever to contest anything. So the judge literally has the SEC on one side and no one on the other. 2/6

In support of neither party, Montana just filed a rather remarkable amicus brief in the SEC’s enforcement case against Kraken. 7 other states support it. Here’s why those states all think the SEC’s “ecosystem” theory is unlawful and in fact a danger to their citizens: 1/5 States have a strong interest in preventing the potential preemption of consumer protection and other state laws by the SEC’s attempt to regulate crypto assets as securities. 2/5

These Senators are even more right than they know. After @SECGov secured a TRO against @DebtBox, it ordered @coinbase to freeze assets or risk sanctions ourselves. We now know that because the TRO was tainted by SEC misrepresentations, so too was this order. 1/5

https://twitter.com/CoinDesk/status/1756315732378300762

But rather than immediately pulling its order after admitting that it deceived the Court, the SEC sat silently. So rather than continue this injustice, we then told the SEC we wouldn't comply further unless they explained why we should. 2/5

We couldn't wait until our deadline next week to address the SEC's response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court. But the SEC’s evasive response goes further, as we set out today. 1/5 The Court should grant mandamus now because the Commission has decided not to grant Coinbase’s rulemaking petition and Is actively harming the industry. 2/5

Yesterday we filed a comment letter on the @SECGov proposed rule that seeks to expand the definition of exchange to include DEXs. Tl; dr: this proposal should NOT be adopted, and certainly not before completing the threshold steps for any rulemaking. 1/11 sec.gov/comments/s7-02… twitter.com/i/web/status/1… Last year the SEC tried to expand the exchange definition to include DEXs w/o providing any notice to the public in the original proposed rule. We and many others raised concerns . 2/11 sec.gov/comments/s7-02…

A few minutes ago, the SEC filed its response to the last week's Third Circuit. You can read it for yourself below together with my own initial read of it. 1/5 1) they repeat the fallacy that they haven't made any decision on new crypto rules; 2) they refuse to commit to any deadline despite the Court's explicit order; 3) they instead "anticipate" making a "recommendation" in 120 days; and most importantly... 2/5

Earlier tonight the Third Circuit issued a short order in Coinbase’s mandamus action today. The court noted the SEC’s suit against us this morning and asked the SEC whether that means the SEC has decided to deny our pending petition for rulemaking. The SEC has 7 days to respond. We continue to believe that the SEC could not be proceeding with litigation against our industry, like the case filed against us today, if the SEC had not already decided to deny our petition for rulemaking.

Tomorrow I will be testifying on Capitol Hill before the House Committee on Agriculture on the need for clear crypto rules and the Digital Asset Market Structure Discussion Draft. Read a summary of my testimony here/below:coinbase.com/blog/we-need-c… The US is falling behind. We cannot afford to ignore crypto while other markets take advantage of our absence, developing rules and regulations that enable the industry to thrive and risk sending jobs, investment, and technological leadership overseas.

Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe. 1/7 Today’s filing may be the first time when the SEC has formally explained in court its views on whether and how the SEC should create rules for the crypto industry. 2/7

Today, Coinbase is sharing our response to the SEC’s Wells notice from last month. 1/7 coinbase.com/blog/coinbase-… At the time when we went public we had detailed discussions with the SEC about the very aspects of our business that are now--two years later--the subject of the Wells notice. Nothing has changed. 2/7

Today, we filed a narrow action in the U.S. Circuit Court to compel the SEC to respond “yes or no” to a rulemaking petition we filed with them last July asking them to provide regulatory guidance for the crypto industry. 1/4 coinbase.com/blog/coinbase-… The SEC is required by law to respond to petitions “within a reasonable time,” but they have not yet responded to our petition from last July, which is why we filed our action in court today. 2/4

A few months ago, Coinbase backed a legal challenge to sanctions imposed by the US govt against Tornado Cash. Today the plaintiffs filed a motion for summary judgment, asking the court to reopen TC for all. Their arguments are simple but powerful. 1/10 assets.ctfassets.net/c5bd0wqjc7v0/5… An initial point: anytime we give privacy to everyone, there is a risk that privacy could be abused by anyone. But the Constitution and laws of our country recognize that we don’t take away privacy from all just because of the unlawful acts of a few. 2/10

Coinbase received a Wells notice from the SEC. After years of asking for reasonable crypto rules, we're disappointed that the SEC is considering courts over constructive dialogue. But if courts are required, so be it. We'll defend the rule of law. 1/15 coinbase.com/blog/we-asked-… Over the past 9 months, CB has met with the SEC more than 30 times, sharing details of our business to build a path to registration. During this time, the SEC hasn't given basically 0 feedback on what to change, or how to register. Instead, today we received a Wells notice. 2/15

Today, @Coinbase submitted a comment letter to our July 2022 SEC petition for rulemaking. We explain why core staking services--those that serve as a pass-through for rewards--are not securities offerings. assets.ctfassets.net/c5bd0wqjc7v0/3… 1/25 Most importantly, core staking services are not an offering of securities; they’re just software services. Paying someone a fee to take a chore off your hands doesn’t make something a securities transaction. 2/25

Everyone committed to the rule of law should read J. Wiles' Voyager decision. These are remarkable statements from a federal court with no skin in the game other than calling things as they are.🧵⬇️ /www.nysb.uscourts.gov/sites/default/files/opinions/312840_1170_opinion.pdf "There are firms that operate as cryptocurrency brokers or exchanges, and have done so for several years, without being subject to clear and well-defined regulatory requirements."