The U.S. Securities and Exchange Commission (SEC) has asked a judge to reject Coinbase’s attempt to have the regulator’s lawsuit against it dismissed. The exchange had alleged that the agency overstepped its authority and abused its discretion in claiming that digital assets offered on the trading platform were unregistered securities.
SEC Adds Arguments to Support Its Claim That Crypto Assets on Coinbase Amounted to Securities
The securities regulator in the United States is not giving up on its litigation against America’s leading cryptocurrency exchange. On Tuesday, the SEC asked a federal judge to reject the attempts of Coinbase to have the Commission’s lawsuit against it dismissed.
In its legal case filed in early June, the SEC alleged that Coinbase evaded its regulations for years and infringed upon various securities laws by illegally operating an unregistered exchange, brokerage and clearing agency. The lawsuit came after the regulatory body sued , the world’s largest crypto exchange, based on similar allegations.
In August, Coinbase urged the court to toss the SEC case, stating that the agency had “overstepped its statutory authority,” “abused its discretion,” and abandoned its own earlier interpretations of the U.S. securities laws.
In an Oct. 3 filing, quoted by Bloomberg, the agency added new arguments to support its case. It said that public statements made by issuers, “many of which were rebroadcast by Coinbase—led investors, including those on Coinbase’s platform, to reasonably expect profits from the issuers’ efforts.” It also described as “unsupported and nonsensical” Coinbase’s view that crypto asset sales on secondary market platforms are not investment contracts.
“It’s more of the same old,” Coinbase’s Chief Legal Officer, Paul Grewal, said commenting on the SEC’s latest arguments. In a post on X, formerly Twitter, he indicated that the company would file a response later in October, reiterating the exchange’s stance that it’s not offering securities and again calling for new crypto-specific regulations from the SEC.
The @SECgov just filed its opposition to our motion to dismiss their case against @Coinbase. It’s more of the same old same old. But don’t just take my word for it – take a look for yourself. 1/7 https://t.co/QMdkRoiq0V
— paulgrewal.eth (@iampaulgrewal) October 3, 2023
Many in the industry and beyond expect the lawsuit to clarify whether the SEC’s jurisdiction extends to crypto assets. Under its current Chair, Gary Gensler, the Commission has insisted that most digital tokens are subject to its rules and that trading platforms should be registered with it. Other cases of public interest include that against Ripple which recently scored a point in its legal battle with the SEC.
Do you think the court will accept the SEC’s new arguments against Coinbase’s attempt to have the lawsuit dismissed? Share your thoughts on the case in the comments section below.
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