The US Court of Appeals for the Third Circuit raised concerns over the Securities and Exchange Commission's (SEC) denial of a rulemaking petition by Coinbase. The exchange, the largest in the US, has criticized the SEC for the lack of clear rules for the industry.

Coinbase and SEC Face Off

The legal battle between Coinbase and the SEC is before the US Court of Appeals for the Third Circuit. In 2022, Coinbase filed a petition asking the regulator to create specific rules for crypto assets to clarify the regulatory framework for securities based on digital platforms.

The SEC denied this request in December 2023, forcing Coinbase to seek judicial intervention to compel the regulator to reconsider its decision. The court's panel of judges expressed skepticism about the SEC's brief, a two-page denial of Coinbase's petition.

Coinbase's Chief Legal Officer, Paul Grewal, criticized the SEC's handling of the petition. In a social media post on X, Grewal pointed out that the SEC has refused to offer a reasonable explanation for its denial while continuing to pursue aggressive enforcement actions against crypto companies.