SEC Rejects Coinbase’s Attempt to Dismiss Lawsuit
The U.S. Securities and Exchange Commission (SEC) has requested a judge to dismiss Coinbase’s motion to have the regulator’s lawsuit against it thrown out. Coinbase had argued that the SEC exceeded its authority and abused its discretion by claiming that the digital assets offered on its platform were unregistered securities.
SEC Supports Claim That Crypto Assets on Coinbase Were Securities
The SEC is continuing its legal battle against Coinbase, the leading cryptocurrency exchange in the United States. The regulatory body has asked a federal judge to reject Coinbase’s attempt to dismiss the SEC’s lawsuit.
In June, the SEC filed a lawsuit alleging that Coinbase violated securities laws by operating an unregistered exchange, brokerage, and clearing agency. Coinbase had previously called for the case to be dismissed, claiming that the SEC had overstepped its authority and abandoned its own interpretations of securities laws.
SEC Adds New Arguments to Its Case
In an October 3 filing, the SEC presented new arguments to support its claim. The agency stated that public statements made by issuers, which were often shared by Coinbase, led investors to expect profits from these issuers’ efforts. The SEC also criticized Coinbase’s view that crypto asset sales on secondary market platforms are not investment contracts, calling it “unsupported and nonsensical.”
Coinbase’s Chief Legal Officer, Paul Grewal, responded to the SEC’s latest arguments by stating that it was more of the same and reiterated the exchange’s stance that it does not offer securities. Grewal also called for new crypto-specific regulations from the SEC.
Lawsuit Expected to Clarify SEC’s Jurisdiction Over Crypto Assets
Many industry experts believe that this lawsuit will determine whether the SEC has jurisdiction over crypto assets. The Commission, under Chair Gary Gensler, has maintained that most digital tokens fall under its rules and that trading platforms should be registered with the SEC. Other notable cases include the ongoing legal battle between Ripple and the SEC.
Hot Take: SEC Continues Legal Battle Against Coinbase, Rejecting Dismissal Attempt
The SEC is refusing to back down in its lawsuit against Coinbase, as it asks a judge to reject the exchange’s attempt to have the case dismissed. The regulator argues that Coinbase evaded regulations and violated securities laws by operating an unregistered exchange. In response, Coinbase claims that the SEC exceeded its authority and abandoned its own interpretations of securities laws.
The SEC has presented new arguments to support its case, stating that public statements made by issuers led investors on Coinbase’s platform to expect profits. Coinbase’s Chief Legal Officer dismisses these arguments as more of the same and calls for new crypto-specific regulations from the SEC.
This lawsuit is significant as it could determine whether the SEC has jurisdiction over crypto assets. The outcome will have implications for the regulation of digital tokens and trading platforms in the United States.
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