Appeals Court Backs Coinbase’s Fight for Crypto Regulations
A U.S. appeals court has rebuked the SEC, declaring its refusal to consider Coinbase’s proposal for crypto-specific regulations as “arbitrary and inconsistent.”
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For years, Coinbase and the SEC have been at odds. The exchange made numerous appeals for the agency to clarify the regulatory framework for cryptocurrencies, only to be met with noncommittal answers. Ultimately, Coinbase resorted to legal action to assert its rights.
The court sided with Coinbase, ruling that the SEC had failed to provide a sound rationale for its actions. The agency’s claim of resource constraints was deemed insufficient, with the court noting that such issues do not excuse regulatory neglect.
Judge Stephanos Bibas didn’t hold back in his individual opinion, sharply criticizing the SEC. Drawing a vivid analogy, he said the regulator’s actions were akin to giving a soccer player a yellow card with no explanation. Such behavior, in his view, contradicts the rule of law and destabilizes the business environment.
Appointed in 2017 by then-President Donald Trump, Judge Stephanos Bibas has served on the U.S. Court of Appeals for the Third Circuit. His long-standing conservative principles and support for Republican policies have been hallmarks of his career.
The court’s decision is poised to reshape the cryptocurrency industry. By scrutinizing the SEC’s authority, it sets a precedent that could inspire other firms to pursue legal strategies to safeguard their operations.
The SEC has declared that it is currently evaluating the court’s decision to determine the appropriate response. But with Gary Gensler stepping down as chairman in the near future, the agency is expected to avoid escalating tensions with Coinbase.
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