Cryptocurrency exchange Coinbase plans to seek a judicial review of a decision by the Securities and Exchange Commission (SEC) to deny its petition for new rules in the digital asset sector. 

The SEC, in a 3-2 vote, said Friday (Dec. 15) that it would not propose new regulations as it disagreed with Coinbase’s argument that current regulations are “unworkable” for the crypto sphere, Reuters reported Friday. 

Coinbase’s chief legal officer, Paul Grewal, said in a Friday post on X, reposted by the company: “Today the SEC denied Coinbase’s petition for rules for crypto. After 18 months of silence, we went to court to get the response the law requires. With appreciation for the Third Circuit, later today we’ll again seek its help by challenging the SEC’s abdication of its duty.” 

Today the SEC denied Coinbase’s petition for rules for crypto. After 18 months of silence, we went to court to get the response the law requires. With appreciation for the Third Circuit, later today we’ll again seek its help by challenging the SEC’s abdication of its duty. ?⬇️ pic.twitter.com/tFjiW53eF7

— paulgrewal.eth (@iampaulgrewal) December 15, 2023

The denial by the SEC marks the latest development in an ongoing battle between the crypto industry and the top U.S. markets regulator, according to the Reuters report. 

The SEC has consistently maintained that most crypto tokens are securities and fall under its jurisdiction, the report said. It has taken legal action against several crypto companies, including Coinbase, for listing and trading tokens that it believes should be registered as securities. 

Coinbase, however, disputes the SEC’s assertion and believes that existing laws and regulations are not clear enough, per the report. Grewal stated that there is still work to be done in creating laws and rules that will benefit consumers and foster innovation in the United States. 

In 2022, Coinbase urged the SEC to establish a specific set of rules for the crypto sector, arguing that current U.S. securities laws are insufficient, according to the report. In April, the firm appealed to a judge to force the regulator to respond to its petition. 

Although the court did not compel the agency to act, Coinbase received a response from the SEC, which ultimately led to Friday’s denial, the report said. 

SEC Chair Gary Gensler supported the decision, saying in a Friday statement that existing laws and regulations already apply to the crypto securities markets, per the report. Gensler has long been critical of the crypto industry, defending his agency’s rulemaking and ongoing enforcement of the cryptocurrency industry during a House hearing in April. 

“Nothing about the crypto markets is incompatible with the securities laws,” he said at the time, emphasizing that in his view, “the vast majority” of crypto tokens are securities.

However, Republican SEC Commissioners Hester Peirce and Mark Uyeda disagreed with the decision, saying in a joint statement that addressing the issues raised by new technologies and innovations is an essential responsibility of a regulator.