The U.S. Court of Appeals has partially granted Coinbase's petition against the SEC, deeming the regulator's denial of digital asset rulemaking "arbitrary."
Coinbase's Claims and SEC's Response
In 2022, Coinbase filed a petition seeking clear rules for digital asset securities regulation. The SEC denied the request in 2023, prompting Coinbase's appeal.
Court's Decision and its Justification
The three-judge panel remanded the case to the SEC, requiring a detailed explanation for its denial. Judge Thomas Ambro criticized the SEC's reasoning, while Judge Stephanos Bibas highlighted the need for regulatory clarity.
Next Steps and Context
It is important to note that this ruling is distinct from the ongoing SEC enforcement case against Coinbase, accusing it of operating as an unregistered securities exchange. The court dismissed SEC's claims about Coinbase's wallets, but other aspects continue. Coinbase's appeal stresses legal interpretation differences regarding the Howey Test in crypto assets.
The ruling underscores increasing scrutiny over SEC's approach to crypto regulation. The commission continues actions against several crypto firms, including Ripple Labs and Binance.
