On September 24, Cointelegraph reported that the U.S. Court of Appeals for the Third Circuit is reviewing the SEC’s decision to reject Coinbase’s petition for regulatory rulemaking regarding cryptocurrencies. The court has questioned the SEC’s reasoning, describing it as too limited.

In July 2022, Coinbase requested the SEC to establish regulatory rules for “securities offered and traded through digital native methods,” seeking clarification on which crypto assets qualify as securities. However, the SEC dismissed the petition in late 2023, prompting Coinbase to appeal for a more substantive response.

Judge Thomas Ambro noted that while the SEC isn’t required to provide a detailed explanation for its rejection, there should be substantive content in the record. He characterized the SEC’s dismissal as “almost nothing.” Coinbase’s Chief Legal Officer, Paul Grewal, criticized the SEC on social media, asserting that the agency “refuses to provide a reasonable explanation” for its rejection and is arbitrarily enforcing the law against the cryptocurrency industry.

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