Following Coinbase’s lawsuit against the SEC in April 2022 over the exchange’s petition for basic crypto rules, the Third Circuit issued a 120-day ultimatum to the SEC, putting pressure on the regulatory body to respond. This was disclosed via a tweet by Coinbase’s Chief Legal Officer, Paul Grewal on June 20th.

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Reacting to the Court’s decision, Ripple CTO David Schwartz shared his thoughts on the recent development and possible implications it may have on crypto assets.

The Dynamics of the Third Circuit’s Order

According to David Schwartz, the Third Court’s decision could be described as a rollercoaster. Recounting that the SEC vs. Coinbase Lawsuit is long overdue.

Recall that in July 2022, Coinbase filed a lawsuit against the SEC asking it to “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods,” referring to digital assets like cryptocurrencies.

At that time, however, the SEC failed to offer any special public response to Coinbase’s petition. Instead, the agency aggressively heightened enforcement actions and warnings against cryptocurrencies, including Coinbase.

Coinbase’s April lawsuit was, therefore, aimed at forcing the commission to respond to the petition which has lingered for close to a year.

While he commended the court for insisting that the SEC reveal when it planned to rule on Coinbase’s request, he was displeased by the fact that the SEC got away with four months just to update the court on just their progress toward getting a staff recommendation.

This is kind of a rollercoaster. The court insisted the SEC tell it when the commission was going to rule on Coinbase's requset, yay. But then let the SEC get away with taking four months just to update the court on just their progress towards getting a staff recommendation.

— David "JoelKatz" Schwartz (@JoelKatz) June 20, 2023

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Implications for Coinbase and other Cryptoassets

Meanwhile, Schwartz viewed the ruling as a victory for Coinbase and crypto assets generally. He shared that he did not expect anything from the exchange’s lawsuit against the SEC, revealing that he initially viewed the Coinbase vs. SEC lawsuit as a publicity stunt.

To be fair, I think everyone was expecting Coinbase to get nothing at all out of this. Frankly, I considered it a publicity stunt at first. So in that light, this is a victory.

— David "JoelKatz" Schwartz (@JoelKatz) June 20, 2023

According to Schwartz, since it began its all-out rampage against crypto assets, the  SEC has undoubtedly frustrated crypto enthusiasts and the recent court order is a possible indication that another US Federal Judge also shared some of those frustrations.

I guess the most positive spin I can put on it is that the fact that Coinbase was successful in getting any relief at all is likely an indication that at least some of our frustration with the SEC is shared by at least one more Federal judge, and maybe lots more Federal judges.

— David "JoelKatz" Schwartz (@JoelKatz) June 21, 2023

As the case unfolds, the outcome of this legal battle will undoubtedly shape the future of crypto regulations in the United States.

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