Coinbase and the U.S. Securities and Exchange Commission (SEC) faced off in a federal appeals court in Philadelphia on September 23, 2024. The case, heard by the Third Circuit, revolves around Coinbase's petition for the SEC to create new rules for digital assets, which the SEC denied in 2022. Coinbase argues that the SEC's denial was arbitrary and capricious. During oral arguments, the court panel, particularly two judges, posed tough questions to the SEC, with one judge calling the SEC's explanation for the denial 'close to vacuous.' This legal battle highlights the ongoing tension between the cryptocurrency industry and regulators over the need for clear regulatory guidelines. The outcome of this case could significantly impact the future of digital asset regulation in the United States.