SEC v. Coinbase: Judge Failla Questions SEC’s Approval of Coinbase IPO
Judge Katherine P. Failla of the Southern District of New York has raised concerns about the U.S. Securities and Exchange Commission’s (SEC) handling of the approval process for Coinbase’s Initial Public Offering (IPO) in 2021. Failla suggested that the SEC should have highlighted the issues with Coinbase’s business model before allowing it to be listed on Nasdaq.
The Bad News:
- Judge Failla questions the SEC’s approval of Coinbase’s S-1 form without raising concerns about potential securities law violations.
- SEC attorney Peter Mancuso states that approval of an S-1 does not indicate approval of the entire business.
- Judge Failla expresses skepticism towards the SEC’s stance and questions why Coinbase was not required to register as a securities exchange.
- Steven Peikin of Sullivan & Cromwell criticizes the SEC, stating that other judges have considered the commission’s review and authorization of registration statements to carry legal weight.
The Good News:
- The approval of Coinbase’s IPO was mentioned in the exchange’s defense, suggesting that the SEC authorized the sale of shares to retail and institutional investors.
- The defense argues that this approval contradicts the recent lawsuit, as some of the assets deemed securities by the SEC were already listed on Coinbase’s platform at the time.
Hot Take:
Judge Failla’s skepticism towards the SEC’s handling of Coinbase’s IPO raises questions about the commission’s role in ensuring the compliance of cryptocurrency exchanges with securities laws. This case highlights the need for clearer communication and regulation to protect investors in the crypto space.
By
By
By
By