Coinbase Scores Partial Win as Court Slams SEC’s Crypto Rules
Cryptocurrency trading platform Coinbase has achieved a partial victory in its legal battle with the U.S. Securities and Exchange Commission (SEC), following a court ruling on January 13.
The case revolves around Coinbase’s request to the SEC for clarification on its rules regarding the application of federal securities laws to digital assets, including cryptocurrencies.
Judge orders SEC to justify denial of Coinbase request
U.S. Court of Appeals for the Third Circuit rules SEC denies Coinbase’s petition has insufficient grounds.
“The SEC’s order is conclusive, ill-founded, and therefore arbitrary and capricious, and we partially grant Coinbase’s petition and remand it back to the SEC for a more complete explanation. But we decline to order the order at this stage. Agency initiates rulemaking process.” explain.
It sent the case back to the SEC and directed the agency to provide a more detailed explanation of its decision. However, the court did not order the SEC to initiate a formal rulemaking proceeding.
Coinbase petitioned the SEC in 2022 for specific rules addressing how federal securities laws apply to digital assets. The company argued that the existing legal framework did not properly consider the unique nature of digital assets, making it difficult to ensure compliance.
Coinbase claims SEC fails to clearly define when digital assets are considered Safety Adds to the confusion. Additionally, the agency’s inconsistent stance on the matter makes the situation worse.
U.S. Securities and Exchange Commission Petition to Deny Coinbase Brief and largely unexplainable response. The regulator said it disagreed with Coinbase’s concerns and had higher priority issues to focus on. The SEC also said it may prefer to address the issue gradually.
This prompted Coinbase to challenge the SEC’s decision and file a petition for judicial review.
“The U.S. Securities and Exchange Commission has filed multiple lawsuits Cryptocurrency Company The court noted that they were not complying with the law but would not tell them how to comply.
This court ruling marks an important moment in ongoing legal and litigation Regulatory fight Around cryptocurrencies and digital assets.
Will Coinbase’s victory help Ripple in its fight against the SEC?
Interestingly, online discussions link recent setbacks SEC’s ongoing legal battle with Ripple. Many are hoping that this ruling will be in favor of Ripple.
“Ripple V SEC will be abandoned. Insider sources predict Coinbase’s ruling will be in favor of Ripple.” wrote Cryptocurrency enthusiasts on X.
Ripple’s head of legal Stuart Alderoty also got into celebration mode, congratulating Coinbase on its win.
“In Gensler’s final days, as his anti-crypto crusade exploded, a federal appeals court laid bare what the industry has been saying for years: that his selective enforcement of securities laws was a (not so) covert attempt to outright ban Shame on the industry” Stuart Aldrotti explain.
this The task facing the SEC now to explain its position. It’s unclear how the agency will meet the growing demand for regulatory clarity on cryptocurrencies.
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