A Consortium of Legal Experts Backs Coinbase in SEC Lawsuit
A group of legal experts from top U.S. law schools have filed an amicus brief supporting Coinbase in its lawsuit with the Securities and Exchange Commission (SEC). The experts argue that the SEC has an incorrect interpretation of what constitutes an “investment contract.”
Key Points:
- Six professors from prestigious law schools have offered their analysis on the term “investment contract” in relation to the SEC’s case against Coinbase.
- They reference the 1946 case of S.E.C. v. W.J. Howey Co, which established the “Howey Test” for identifying securities.
- The professors argue that an “investment contract” only exists when an investor receives a contractual right to an enterprise’s income, profits, or assets.
- They highlight the inclusion of the term “investment contract” in Minnesota’s blue sky law in 1919 and its interpretation in subsequent cases.
- The experts conclude that an investment contract requires contractual undertakings that deliver future value based on a business’s income, profits, or assets.
Hot Take:
This amicus brief from leading legal experts provides strong support for Coinbase’s position in its lawsuit against the SEC. The professors’ analysis of the term “investment contract” offers a historical perspective and challenges the SEC’s interpretation. As the case progresses, this could have significant implications for how cryptocurrencies are classified as securities in the future.
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