The U.S. Court of Appeals for the Third Circuit has asked the U.S. Securities and Exchange Commission (SEC) to justify its rejection of Coinbase’s petition for clear cryptocurrency guidelines, stating that their reasons given were insufficient.
Coinbase Wins Court Favor Amid Persisting SEC Battle
The conflict between the U.S. Securities and Exchange Commission (SEC) and the American cryptocurrency trading platform, Coinbase, has been ongoing for quite some time due to accusations that they have broken securities regulations.
In the heat of this dispute, Coinbase has countered the regulator’s stance, arguing that the Securities and Exchange Commission (SEC) lacks adequate legal jurisdiction in this particular case. To bring greater understanding, Coinbase is urging the SEC to establish regulations specifically for cryptocurrencies, clarifying how federal securities laws apply to the unique landscape of digital assets, highlighting their specific context of applicability.
Despite the Securities and Exchange Commission not approving Coinbase’s request for new rules, it has prompted the need for the court’s involvement instead.
Court Demands More Clarity From SEC
On January 13th, the judge made decisions which partly granted Coinbase’s request, since they were seeking further explanation from the Securities and Exchange Commission (SEC) regarding their rejection of Coinbase’s proposal for regulations specific to cryptocurrencies.
Despite the regulatory agency sending a two-page rejection of the petition, the court found the letter unclear. Consequently, the court deemed the Securities and Exchange Commission’s vaguely responsive approach to the regulatory petition as “arbitrary and capricious.
Although many anticipations suggested otherwise, the court hasn’t compelled the Securities and Exchange Commission (SEC) to establish new rules in response to Coinbase’s request. As a result, it remains unclear whether the crypto industry will shortly benefit from clear regulations that outline how digital assets should be classified as securities.
According to Judge Thomas L. Ambro’s decision, “We are sending this case back to the SEC for them to provide a clearer explanation; they should avoid offering another unclear explanation, as it would be one more in a series of similar ones.
In their additional statements, the court echoed Coinbase’s worries about the strict measures taken by the SEC towards the crypto sector. However, they noted that existing regulations may not be compatible with the innovative structure of cryptocurrency technology. The court also expressed “concerns regarding constitutional due process” in relation to the SEC’s enforcement actions.
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2025-01-14 06:12