Coinbase (NASDAQ:COIN) won a minor victory in court regarding its ongoing legal battle with the Securities and Exchange Commission (SEC).
Coinbase Chief Legal Officer Paul Grewal shared via X that the Third Circuit Court has chastised the SEC for its denial of rulemaking – something Coinbase pursued via a petition – a legal process designed to compel the Commission to move on an area deemed to require clarity.
Grewal explained:
“… the Court held that the “SEC’s order was conclusory and insufficiently reasoned, and thus arbitrary and capricious, we grant Coinbase’s petition in part and remand to the SEC for a more complete explanation.”
Grewal thanked the court and Judge Bibas for their decision.
“We appreciate the Court’s careful consideration.”
The court’s Order states:
“The SEC denied Coinbase’s rulemaking petition. In a single paragraph, it explained that it disagreed with the petition’s concerns; that it had higher-priority agenda items— namely, everything else it was doing; and that it may prefer to gather additional information through incremental action before engaging in more far-reaching rulemaking. Coinbase’s U.S. subsidiary, Coinbase, Inc., petitions us to review the SEC’s denial.”
And;
“… we believe the SEC’s order was conclusory and insufficiently reasoned, and thus arbitrary and capricious, we grant Coinbase’s petition in part and remand to the SEC for a more complete explanation. But we decline at this stage to order the agency to institute rulemaking proceedings.”
The Order remands the SEC and asks it to explain itself and “not give yet another poor explanation in an already-long line of them.”
