Law Professors Support Coinbase in SEC Battle

Six U.S. law professors have filed an amicus brief in support of Coinbase’s fight against the SEC. They argue that for tokens on Coinbase to be considered investment contracts, their issuers must have some contractual obligation to investors. The professors examine the origins of securities laws and cite several cases that recognize the importance of contractual arrangements between issuers and investors. Coinbase shares this view, stating that an investment contract requires an ongoing business enterprise with enforceable obligations to investors. However, the SEC disagrees, stating that Coinbase is attempting to create its own test for investment contracts. The regulator believes that even without a contractual obligation, an arrangement can still be considered an investment contract.

Main Points:

Six law professors support Coinbase in its battle against the SEC
Investment contracts require contractual undertakings from issuers to investors
Coinbase and the professors argue that contractual obligations are necessary for an investment contract
The SEC disagrees, stating that Coinbase is creating its own test for investment contracts
The SEC believes that an arrangement can be an investment contract even without a contractual obligation

Hot Take:

The amicus brief filed by the law professors provides valuable support for Coinbase’s position in its battle against the SEC. The professors’ argument that investment contracts require contractual undertakings aligns with Coinbase’s stance. However, the SEC’s belief that an arrangement can still be considered an investment contract without a contractual obligation adds complexity to the case. Ultimately, the court will need to carefully consider the historical context of securities laws and the precedents set by previous cases to make a fair judgment.