Michaela Alvez
The U.S. Court of Appeals for the Third Circuit has delivered a partial victory to Coinbase in its ongoing legal dispute with the U.S. Securities and Exchange Commission (SEC).
The U.S. Appeals Court questioned the SEC’s rejection of Coinbase’s petition for cryptocurrency-specific regulations. The court called on the regulator to justify its decision, stating that the reasons provided for denying Coinbase’s request were insufficient.
In a court filing on January 13, the U.S. Appeals Court criticized the SEC’s rejection of Coinbase’s 2022 petition, describing it as “arbitrary and capricious.” The SEC had dismissed the petition in 2023 with a brief two-page reply, leading Coinbase to seek judicial review of the decision.
“We properly remand this back to the SEC to explain itself, it should not come up with yet another poor explanation in a long line of such,” Judge Thomas L. Ambro stated in the filing.
The three-judge panel did not require the SEC to create new regulations immediately but emphasized that the agency must provide a more thorough explanation for its decision.
Moreover, the court’s decision arrives at a time when there is growing anticipation for clearer and more favorable cryptocurrency regulations.
The court’s decision in the Coinbase vs. SEC case has also cast doubt on the regulator’s approach to overseeing the cryptocurrency market.
SEC Vs. Crypto Firms
The SEC has been actively involved in several high-profile legal battles with major cryptocurrency firms, as part of its ongoing effort to regulate the rapidly growing digital asset space.
In addition to its ongoing case with Coinbase, the SEC has initiated actions against several other large crypto companies, arguing that many cryptocurrencies and their associated services fall under securities laws and should therefore be regulated like traditional securities.
One of the most notable cases involves Ripple Labs, the creator of the XRP token. In December 2020, the SEC filed a lawsuit against Ripple, alleging that it had conducted an unregistered securities offering by selling XRP tokens.
Additionally, the SEC has targeted other exchanges and projects, including Binance, the world’s largest crypto exchange by trading volume. The SEC has scrutinized Binance for alleged violations related to the trading of unregistered securities.
Read More
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- Coinbase Delists USDT, Critics Say ‘Don’t Believe The FUD’
- Coinbase Rejects $1B Lawsuit Over wBTC Delisting, Says Risk Tied to Justin Sun
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
