The US Third Circuit Court’s recent decision in the Coinbase lawsuit marks another blow to the US Securities and Exchange Commission (SEC) and Chairman Gary Gensler. While the court calls for the SEC’s lack of transparency in denying Coinbase’s request for crypto-specific regulations, the ruling fuels debate on Gary Gensler’s enforcement policies.
XRP Lawyer John Deaton Slams SEC Chair Gary Gensler
In his latest X post on January 14, pro-XRP lawyer John E. Deaton criticized Gensler for “leaving the SEC in disgrace.” The attorney argued that the SEC’s reluctance to provide regulatory clarity has significantly stained the agency’s reputation.
Further, Deaton demanded a regulatory overhaul, adding that the new SEC Chair Paul Atkins faces a challenging situation ahead of him. Many including Deaton believe the new SEC Chair could reform the crypto regulatory landscape under the Trump administration.
Another example of how @GaryGensler is leaving the @SECGov in disgrace. The reputation of the SEC, both inside and outside the courtroom, is in complete shambles.Paul Atkins has his work cut out for him.
It would be nice to witness real reform at the SEC. Also, we need to… https://t.co/ZnaSdbJbrc
— John E Deaton (@JohnEDeaton1) January 14, 2025
In addition, the XRP attorney suggested the abolition of the accreditor investor rule. While the SEC classifies individuals as accredited investors based on wealth and income thresholds, Deaton sees it as a biased approach. He stated, “The rule is inconsistent with free market capitalism and oppressive in a society of self-determination.”
Coinbase Secures Partial Win Against SEC
The US Third Circuit Court ordered the SEC to reconsider providing clear guidelines on cryptocurrency regulation in Coinbase vs SEC lawsuit. In 2022, Coinbase filed a petition of rulemaking, asking the SEC to provide clarity on crypto regulation. While the exchange sought crypto-specific rules, including asset classification, the SEC rejected the petition.
However, the recent court ruling ordered the regulator to explain its denial of the exchange’s motion. The judge opined:
“Rather than force the agency to make a rule, we order it to explain its decision not to. Indeed, a rule may not prove necessary to solve the notice problems here; the agency could just state its position on crypto assets unequivocally.”
Crypto Community Exalts Coinbase’s Win
Coinbase’s Chief Legal Officer Paul Grewal revealed the exchange’s victory via his X post, stating “We just won our petition for a writ of mandamus at the Third Circuit.” According to his statement, the court deemed the SEC’s move “arbitrary and capricious.”
At the same time, Ripple CLO Stuart Alderoty applauded Coinbase and Grewal for their win over the regulatory agency.
Meanwhile, lawyers including ex-SEC James Farrell and pro-XRP lawyer Fred Rispoli discuss how the lawsuit will pave the way for the SEC under incoming Chair Paul Atkins to work on crypto regulations and implications for other crypto lawsuits.
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