In the latest fight between the SEC and cryptocurrency, a US court has asked the regulator to explain why it rejected Coinbase’s request for cryptocurrency-specific regulation. The United States Securities and Exchange Commission is now the subject of a federal court order to fully explain why the agency has refused to propose clear rules for crypto securities.
JUST IN: 🇺🇸 US court asks SEC to “explain” for rejecting Coinbase’s request for crypto-specific regulation.
– Watcher.Guru (@WatcherGuru) January 13, 2025
A three-judge panel of the U.S. Court of Appeals for the Third Circuit, in a legal rebuke of the securities regulator, partially sided with Coinbase’s efforts to get the agency to offer clarity legal by drafting crypto regulations this week. “Rather than force the agency to establish a rule, we order it to explain its decision not to do so,” one of the judges wrote. “Indeed, a rule may not be necessary to resolve the reporting issues here; the agency could simply state its position on crypto assets unequivocally. Judge Stephanos Bibas added: “This should not give another bad explanation in an already long list of them. »
US court puts SEC under scrutiny for ‘capricious’ crypto regulation
The request comes during the final week of the term of Chairman Gary Gensler, who will step down as SEC chairman next week. In line to replace it is Paul Atkinsa Republican chosen by new President Donald Trump. Atkins is expected to lead a new SEC that will impose much looser restrictions on the cryptocurrency industry, opening the door to clearer regulations.
Also read: Donald Trump to issue crypto policy executive orders on his first day in office
Additionally, Monday’s ruling called the SEC’s crypto actions “arbitrary and capricious.” Because we believe the SEC’s order was conclusive and insufficiently reasoned, and therefore arbitrary and capricious, we grant Coinbase’s motion in part and remand to the SEC for a fuller explanation. “, ruled the judges.
Following Trump’s victory in the 2024 presidential election, the cryptocurrency sector will be in the spotlight. Specifically, the SEC was set to undergo a massive change with the new administration relaxing crypto regulations. Atkins’ appointment and Gensler’s upcoming departure will mark the beginning of this long-awaited change for those in the crypto industry.
“We appreciate the court’s careful consideration,” Paul Grewal, Coinbase’s chief legal officer, said in an article on X. The SEC has not yet commented on the new request from the US court.
