A panel of federal appeals court judges in Philadelphia dealt another blow to the SEC's cryptocurrency regime on Monday, appearing as... The most recent landmark court To question how the federal agency handles its regulation of digital assets.

Today the US Court of Appeals for the Third Circuit ruled in favor of Coinbase, which... File a lawsuit against Securities and Exchange Commission last year due to the agency's refusal to explicitly set out its own cryptocurrency policy. Instead of creating rules specific to cryptocurrencies, the Securities and Exchange Commission instead He sued intermittently Cryptocurrency companies over the past six years have been in a pattern that has been described disparagingly “Organization through implementation.”

Today a three-judge panel, made up of two Democrats and one Republican, to rule The SEC's response to Coinbase's request for cryptocurrency rules was unacceptable.

“Because we believe the SEC’s order was categorical, insufficiently justified, and therefore arbitrary and capricious, we grant Coinbase’s request in part and are sending it to the SEC for a more complete interpretation,” today’s order said.

The justices added that they declined, however, to force the SEC to create cryptocurrency-specific rules, as Coinbase had requested.

According to Justice Thomas Umbro, a Clinton-era Democrat who wrote Monday's opinion, prior case law has held that an agency like the SEC can only be forced to make rules against its will if extreme delay in creating those rules "would endanger human life." to risk” - this requirement is clearly not met by the regulations regarding cryptocurrencies.

So, the SEC doesn't have to issue new rules for cryptocurrencies now, but it should explain to Coinbase in more detail why it has refused to do so so far.

“Rather than force the agency to issue a rule, we order it to explain its decision not to do so,” Justice Stefanos Bibas, a Republican appointed to the court by Donald Trump, wrote Monday in a concurring opinion. “In fact, the rule may not be necessary to solve the problems here; The agency can unambiguously state its position on crypto assets.”

Bibas warned the SEC that its interpretation should address the question directly, not avoid it.

“It shouldn't give another bad explanation in an already long line of them,” he said of the agency.

Paul Grewal, chief legal officer at Coinbase, celebrated the ruling in a post on X (formerly Twitter), taking no apparent issue with the court's refusal to force the SEC to create new rules for cryptocurrencies.

“We appreciate the court’s careful consideration,” Grewal wrote.

When asked when the SEC plans to issue an explanation of its cryptocurrency policies, or what such an explanation might look like, a spokesperson for the agency said: Decryption These matters are currently being considered internally.

“We are reviewing the decision and will determine next steps as appropriate,” the spokesperson said.

For years, Chairman of the SEC Gary Gensler He insisted that his agency's cryptocurrency policies were self-explanatory given their clear compliance with existing securities laws.

This situation made him Lots of enemies In this sector. Moreover, a recent series of federal court rulings appear to have begun to contradict the president's narrative, coloring the SEC's treatment of cryptocurrency companies as unusual and... It deserves legal review.

These potential legal cracks in the SEC's cryptocurrency system came just days before it could collapse due to a shift in political tides. Will Gensler Resignation On January 20, the same day as President-elect Donald Trump's inauguration. A potential replacement for the president is a former SEC commissioner Paul Atkinsis a crypto enthusiast who will almost certainly reverse the agency's aggressive treatment of digital assets.