Coinbase Global Inc., one of the largest cryptocurrency exchanges in the United States, filed a lawsuit against the U.S. Securities and Exchange Commission, requesting that the regulatory agency respond to its months-old petition asking for clear cryptocurrency guidelines.

The SEC ensures that federal law is enforced against market manipulation.

Because the cryptocurrency market is relatively new and with bankruptcy filings of prominent cryptocurrency exchanges causing skepticism, regulators began enforcing some of its laws on digital coin exchanges.

In its July 2022 petition, Coinbase  asked the SEC “that the commission propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods.”

The governmental regulator has yet to respond to the petition filed as of May 2.

But, the SEC sent Coinbase a “Wells Notice” letter months after filing the petition. The agency informed the company that infractions were discovered and that it would pursue legal action.

In response to the Wells Notice letter, Coinbase filed a motion to the U.S. Court of Appeals for the Third Circuit Court asking “That the court order the SEC to respond at all.”

Coinbase filed the motion under the Administrative Procedure Act, requiring the SEC to respond to the petition.

“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,” Paul Grewal, the chief legal officer at Coinbase, wrote in a blog post. “The rulemaking process is a critical step to giving the public notice about what activities they can and cannot engage in.”

Conditionally, Brian Armstrong, the co-founder and CEO of Coinbase, tweeted that the exchange is “committed to building in the U.S. and around the world,” defending itself and standing up for the rule of law.

The SEC is also involved in numerous legal disputes with other cryptocurrency firms such as Ripple, Genesis and Gemini.

Bittrex, another cryptocurrency exchange, announced it would wind down operations in the United States, citing that the lack of regulations makes it challenging to achieve the company’s goal of maturing the cryptocurrency space.

Executives expressed concerns that the lack of regulations around cryptocurrency will cause the United States to fall behind other countries that are more accepting of cryptocurrency.

“Europe is really emerging as a leader in terms of setting really clear regulations and rules that allow crypto companies and also traditional finance to embrace crypto,” Ripple President Monica Long told CNBC. “MiCA, the set of rules set forth by 27 countries who’ve come together to set a common framework which is remarkable when the U.S. has one government, and they can’t get their act together.”

During his “office hour” video series, SEC Chair Gary Gensler expressed concerns about investors in the market, citing that “the lack of compliance by these crypto platforms means that you don’t have basic investors protections.”

“I think we’re sort of continuing to watch the SEC play this game of punishing the people that are still surviving,” Nicolas Cary, president of Blockchain.com, told CNBC. “And it’s a little bit, you know, sort of a frustrating thing to observe.”