A recent ruling by the Third Circuit Court of Appeals has given Coinbase an advantage in its legal battle with the Securities and Exchange Commission (SEC) over allegations of offering unregistered securities products. The court ordered the SEC to provide a legal basis for its lack of response to a 2022 petition requesting formal rule-making in the digital assets sector.
The Third Circuit Court of Appeals has ruled that the SEC must file its response within 10 days, followed by Coinbase’s response seven days later.
According to Coinbase, the SEC has not provided adequate regulatory guidance for US-based crypto companies. They argue that the commission should “set forth how those inapt and inapposite requirements are to be adapted to digital assets” at a minimum.
Coinbase also cited a 2022 petition requesting formal rulemaking in the digital assets sector, to which the SEC has yet to respond. The court’s 10-day deadline for the SEC to provide a legal basis for its lack of response to the petition is a significant step in Coinbase’s legal battle with the commission.
In March, the SEC announced its intention to sue Coinbase over allegations of offering unregistered securities products. Coinbase has been attempting to take a preemptive approach to this case, and the recent court ruling has given them an advantage in the ongoing legal battle.
The regulation of the crypto industry continues to be a topic of debate and controversy, and the outcome of this case is likely to have far-reaching implications for the industry as a whole.
The Third Circuit Court of Appeals ruling marks a significant milestone in the legal proceedings between Coinbase and the SEC.