During a session in Philadelphia on Monday, federal judges expressed their frustration with the U.S. Securities and Exchange Commission (SEC) over its refusal to provide clear answers on cryptocurrency regulations, especially concerning Bitcoin and Ethereum.
In the U.S. Court of Appeals for the Third Circuit, the debate intensified as Coinbase’s legal team pressed the SEC for clearer regulations to replace their current, inconsistent approach. Over the years, the SEC has tackled crypto issues primarily through sporadic lawsuits rather than concrete rulemaking.
The three-judge panel, representing a mix of political appointments, probed both sides about the specific guidelines the SEC employs and questioned the transparency of these practices. The panel’s collective frustration grew as the SEC avoided direct answers regarding its stance on Bitcoin and Ethereum.
Federal Judges’ Concerns Over Crypto Regulation
The hesitancy of SEC’s attorney, Ezekiel Hill, to clarify whether Bitcoin and Ethereum are commodities only added to the judges’ skepticism. Hill’s insistence on case-by-case evaluations without a definitive stance left Judge Stephanos Bibas and his colleagues questioning the SEC’s inconsistency.
Judge Bibas, appointed under President Trump, and Judge Thomas Ambro, appointed by President Clinton, both voiced their frustrations over the SEC’s lack of clear, public guidelines on cryptocurrencies.
Call for Clear Crypto Regulations: Bitcoin and Ethereum in Focus
Judge Ambro expressed his concerns directly, suggesting that the SEC’s evasive tactics might seem like an attempt to undermine the crypto industry without transparent rulemaking. Similarly, although the SEC’s approval of Bitcoin and Ethereum ETFs earlier this year appeared to classify them as non-securities, the lack of an explicit statement continues to create uncertainty.
Echoing the sentiments of the judges, Coinbase’s attorney, Eugene Scalia, highlighted the industry’s frustration with the SEC’s opaque stance. Scalia pressed the court to take action, stressing the need for definitive regulatory clarity on widely-used tokens like Bitcoin and Ethereum.
“I leave this court understanding the SEC’s views on this topic even less than when I entered,” Scalia stated, reflecting widespread industry concerns.
As the crypto space continues to grow, clear and consistent regulatory guidelines from the SEC are essential. The court’s intervention may offer a pathway towards achieving that clarity.
Edited by Andrew Hayward
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