Coinbase Scores Legal Win as Court Criticizes SEC Handling

The Third Circuit Court of Appeals has ruled partially in favor of Coinbase in its legal challenge against the Securities and Exchange Commission (SEC), calling the agency’s rejection of Coinbase’s 2022 rulemaking petition “arbitrary and capricious.”

The court ordered the SEC to revisit the petition and provide a clearer justification for its decision.

The court found the SEC’s reasoning insufficient, highlighting flaws in its approach to addressing Coinbase’s request for regulatory clarity on digital assets. Coinbase’s Chief Legal Officer, Paul Grewal, welcomed the decision, noting the court’s critical stance on the SEC’s handling of the matter.

“We appreciate the court’s thoughtful review,” Grewal said, emphasizing the importance of clear and reasoned regulatory actions.

This ruling pressures the SEC to deliver a more transparent framework for cryptocurrency oversight. Critics, including crypto journalist Eleanor Terrett, argue the case reflects a broader trend of the SEC’s inconsistent approach to crypto regulation. The outcome may set a precedent for greater accountability as the industry continues to demand clear guidelines for digital assets.