This section contains the nature of the case and procedural background.

P is a trading platform for digital assets. Digital assets are issued and transferred using a 'blockchain,' which is essentially a decentralized public ledger spread across a network of many computers. Every participant on a blockchain network holds a copy of the full chain of transactions. All computers in the network digitally record each transaction in data packages called 'blocks.' Each block contains a set of transaction records, including a timestamp and a reference to the previous block in the sequence. To verify a transaction, another block irreversibly joins the chain of all previous transactions-hence, blockchain. Every new transaction increases the reliability of the ledger because '[e]ach additional block strengthens the verification of the previous block and hence the entire blockchain.' The core innovation of a blockchain network is decentralization. In a mature blockchain network, verifying transactions, issuing coins, and using tokens do not require oversight by a central authority or participation by human intermediaries. But this feature has run up against federal securities laws. In 2017, the SEC started to focus its attention on whether digital assets themselves are securities. The SEC claimed that a digital asset is a security, and thus subject to the federal securities laws, if it is an 'investment contract.' The SEC emphasized that the definition of investment contract 'embodies a 'flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.'' In 2019, the SEC staff produced the framework for investment contract analysis of digital assets. This framework emphasized that 'issuers and other persons and entities engaged in the marketing, offer, sale, resale, or distribution of any digital asset will need to analyze the relevant transactions to determine if the federal securities laws apply,' and explained that Howey provides the touchstone. The SEC expanded its enforcement agenda to digital asset exchanges in 2023, and in June of that year, filed an enforcement complaint against P. D alleged that P, through its trading platform for digital assets, had operated as an unregistered broker, exchange, and clearing agency. D's enforcement action against P remains ongoing. Before the enforcement action, P petitioned D to propose new rules addressing how and when digital assets qualify as securities subject to existing securities laws. P urged D to adopt new rules tailored specifically to digital assets. Nine months after P filed its rulemaking petition, it petitioned us for a writ of mandamus ordering the SEC to act on its request. D informed us that its staff had made a recommendation to the Commissioners, but that the Commissioners had not yet made a final decision on the petition. The SEC eventually denied P's rulemaking petition in December 2023. P then petitioned this court to review the SEC's decision and asks that we order D to institute a notice-and-comment rulemaking proceeding.

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