Judge Stephanos Bibas of the Third Circuit Court has called for a reconsideration of the Securities and Exchange Commission's (SEC) rejection of Coinbase's rulemaking petition. The statement was made in a ruling filed on January 13.
"The SEC denied Coinbase's rulemaking petition, explaining in a single paragraph," said Bibas. "Coinbase argued in its petition that the existing securities-law framework does not account for certain unique attributes of digital assets."
According to Justia, the U.S. Court of Appeals for the Third Circuit reviewed the SEC’s denial of Coinbase’s petition concerning cryptocurrency regulations. Arguments were presented on September 23, 2024, with Coinbase expressing concerns about the feasibility of complying with current securities regulations. The court remanded the issue, instructing the SEC to provide a more comprehensive justification for its decision.
Social Capital Markets reports that in 2024, the SEC issued $4.68 billion in cryptocurrency-related fines, marking a significant increase from $150.26 million in 2023. This surge was primarily attributed to a $4.5 billion settlement with Terraform Labs. Since 2013, over $7.42 billion has been collected by the SEC in cryptocurrency fines, with 63% occurring in 2024.
The U.S. Department of Justice highlighted that TD Bank faced a $3 billion fine for failing to comply with Bank Secrecy Act requirements; however, only one employee, Leonardo Ayala, was criminally charged. Ayala allegedly facilitated money laundering by providing debit cards for fraudulent accounts at a Florida branch.
Bibas is noted as a former law professor at the University of Pennsylvania Carey Law School and has an extensive academic and professional background including degrees from Columbia University, Oxford, and Yale Law School.
According to SIFMA (Securities Industry and Financial Markets Association), the SEC has intensified its regulatory activity with 54 items on its rulemaking agenda as of last fall. In early 2022 alone, it issued 16 new rule proposals—a pace usually seen during major financial crises—indicating its commitment to tightening regulation on financial institutions and markets.