The SEC Faces Another Legal Setback
In yet another blow to the U.S. Securities and Exchange Commission (SEC), the United States Court of Appeals for the Fifth Circuit has ruled that the SEC acted “arbitrarily and capriciously” in a case involving the stock buyback disclosure rule. This comes shortly after a federal court also found the SEC’s actions to be arbitrary in a separate matter concerning a spot bitcoin exchange-traded fund (ETF) application.
Crypto Community Takes Notice
Although the recent ruling is unrelated to cryptocurrency, it highlights a pattern where the SEC has repeatedly lost legal battles. The crypto community has taken note of this, with Ripple’s chief legal officer expressing concern over the SEC’s behavior under Chairman Gary Gensler.
Grayscale Investments’ Victory
Coinbase’s Chief Legal Officer, Paul Grewal, pointed out that another federal court recently ruled in favor of Grayscale Investments, further reinforcing the notion that the SEC has been acting arbitrarily and capriciously. Grayscale Investments had sought approval to convert its bitcoin trust into a spot bitcoin ETF, which was initially rejected by the SEC. However, the Court of Appeals for the District of Columbia Circuit overturned this decision and instructed the SEC to reconsider.
Ripple’s Success Against the SEC
Ripple’s Chief Legal Officer, Stuart Alderoty, also highlighted the SEC’s repeated failures in legal battles against Ripple. Notably, a judge ruled that XRP is not a security and the SEC dropped charges against Ripple’s CEO and co-founder. Despite these setbacks, Chairman Gary Gensler remains committed to taking enforcement actions against crypto firms due to his belief that the industry is plagued by fraud and misconduct.
Hot Take: SEC’s Troubling Pattern of Arbitrary Actions
The recent court rulings against the SEC raise concerns about the regulatory body’s arbitrary and capricious behavior. With multiple federal courts finding fault with the SEC’s actions, it calls into question their adherence to the law. This pattern of behavior under Chairman Gary Gensler is troubling and warrants further examination. The crypto industry, as well as investors and stakeholders, should be wary of the SEC’s approach to regulation in light of these legal setbacks.