HARRSIBURG, Pa. (AP) — A federal appeals court says the U.S. Securities and Exchange Commission must better explain why…
HARRSIBURG, Pa. (AP) — A federal appeals court says the U.S. Securities and Exchange Commission needs to better explain why it rejected a request from Coinbase to develop regulations to cover the booming asset sector cryptographic – although the judges failed to overturn the decision. agency decision.
The 3-0 ruling Monday by the 3rd U.S. Circuit Court of Appeals was a partial victory for Coinbase Global Inc., which went to court after the SEC denied its July 2022 request asking the agency to clarify how securities laws apply to assets such as cryptocurrencies and tokens.
Coinbase argued that the SEC applied existing securities laws to digital assets, making sweeping rules necessary.
Asked for comment, a Coinbase spokeswoman pointed to an article on Messages seeking comment were left with the SEC.
A June 2023 enforcement action remains pending by the SEC against Coinbase Inc., alleging that its digital asset trading platform operates as an unregistered broker-dealer, exchange and clearing agency.
The SEC said its crypto regulations could change based on the “numerous commitments” it currently pursues and that developing new rules would relieve it of other obligations, the court said.
“A single sentence disagreeing with the primary concerns of a rulemaking petition is conclusive and gives us no assurance that the SEC has considered Coinbase’s applicability objections, nor does it explain how she took them into account,” wrote Judge Thomas L. Ambro.
Ambro said the agency has taken a general position that certain digital assets may be considered securities and said it may directly address the issues raised by Coinbase through a future rulemaking process. .
“He has stated that he believes the existing securities legal framework is not impractical for digital assets, but we have no basis in the record to determine why he thinks that or how he arrived at this conclusion,” Ambro wrote. “This explanation is not “thin”, it is “meaningless”.
The court said the SEC must provide a more complete explanation for an “insufficiently reasoned” decision, but the justices did not order it to begin the process of developing new rules.
“The SEC repeatedly sues crypto companies for not complying with the law, but it will not tell them how to comply,” Judge Stephanos Bibas wrote in a concurrence. “This reservation creates a serious constitutional problem; due process ensures fair notice.
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