SEC Faces Another Legal Setback: Court Rules Decision “Arbitrary and Capricious”

In yet another blow to the U.S. Securities and Exchange Commission (SEC), the United States Court of Appeals for the Fifth Circuit has deemed the SEC’s actions “arbitrary and capricious” in a case involving the stock buyback disclosure rule. Ripple’s chief legal officer expressed concern over this recurring pattern of regulatory behavior under Chairman Gensler.

Continuing Legal Challenges for the SEC Adding to the SEC’s legal woes,

the Fifth Circuit found the SEC’s stock buyback disclosure rule to be arbitrary and capricious. While this case doesn’t directly involve cryptocurrency, it underscores a concerning trend within the regulatory body, as noted by the crypto community.

Coinbase’s Chief Legal Officer, Paul Grewal, emphasized the significance of this ruling, highlighting that various federal courts of appeal have consistently criticized the SEC’s decisions as arbitrary and capricious, violating the Administrative Procedure Act.

Grayscale Investments, engaged in a legal battle to convert its flagship bitcoin trust (GBTC) into a spot bitcoin ETF, recently secured a favorable ruling from the Court of Appeals for the District of Columbia Circuit. The court sided with Grayscale, criticizing the SEC’s inconsistent treatment of similar products.

Echoing these sentiments, Ripple’s Stuart Alderoty expressed concern over the SEC’s repeated failure to adhere to legal standards. Alderoty highlighted the SEC’s recent losses against Ripple and questioned the regulator’s commitment to upholding the law under Chairman Gensler’s leadership.

Despite these setbacks, SEC Chairman Gary Gensler has maintained an aggressive stance against crypto firms, citing concerns over fraud and misconduct within the industry.

What are your thoughts on this latest legal setback for the SEC? Share your views in the comments below.

[Tags: SEC, United States Court of Appeals, Legal Battle, Regulatory Compliance, Cryptocurrency, Ripple, Grayscale Investments, Bitcoin]


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