Third Circuit Orders SEC to Explain Refusal of Coinbase's 2022 Crypto Regulation Petition

Jan 13, 2025, 09:17 PM

The U.S. Court of Appeals for the Third Circuit has ruled in favor of Coinbase, ordering the Securities and Exchange Commission (SEC) to provide a more detailed explanation for its refusal to create specific regulations for cryptocurrencies. The court found the SEC's decision to deny Coinbase's 2022 petition for rulemaking on how securities laws apply to digital assets to be 'arbitrary and capricious.' The ruling mandates the SEC to clarify its stance on crypto assets, though it stops short of compelling the agency to draft new rules. This decision marks a significant legal victory for Coinbase, which has been engaged in multiple legal battles with the SEC, including defending against an SEC enforcement action. The ruling comes as SEC Chair Gary Gensler is set to step down, with former Commissioner Paul Atkins poised to take over, potentially shifting the agency's approach to crypto oversight.