Litigation Analyst Predicts Coinbase’s Victory in SEC Lawsuit
Litigation analyst Elliott Stein believes that Coinbase will successfully dismiss the current lawsuit filed by the SEC against the exchange. Stein accurately predicted Grayscale’s victory over the SEC last year, which paved the way for spot Bitcoin ETFs. Coinbase’s argument, which is seen as more compelling, revolves around the requirement for investments to be in a business rather than just an ecosystem, and it should come with an enforceable obligation.
Precedent Set by Ripple Case
The perspective gained traction after the Ripple case, where it was determined that the sale of digital assets on public exchanges did not fit neatly within the Howey test, a legal standard used to determine investment contracts. This precedent supports Coinbase’s position in its lawsuit against the SEC.
Potential Escalation to Supreme Court
Stein predicts that even if the lawsuit progresses, it could ultimately be escalated to the Supreme Court. It is anticipated that the definition of “investment” might be narrowed in the Supreme Court, which would work in Coinbase’s favor. The exchange’s definition of investment is considered strong enough to counter the SEC’s claims regarding staking. Additionally, the SEC’s allegations lack sufficient detail to establish that Coinbase acted as a broker.
Court Scrutinizes SEC’s Stance
The SEC sued Coinbase last June, accusing the exchange of trading 13 tokens that functioned as unregistered securities. During a recent hearing in the Southern District of New York, Judge Katherine Polk Failla expressed dissatisfaction with the SEC’s stance and closely examined the Securities Act of 1933.
Hot Take: Coinbase Likely to Prevail Against SEC
Litigation analyst Elliott Stein believes that Coinbase has a strong chance of winning its ongoing lawsuit against the SEC. The precedent set by the Ripple case and Coinbase’s compelling argument regarding investment definitions work in its favor. Even if the lawsuit progresses, it may reach the Supreme Court, where a narrower definition of “investment” could benefit Coinbase. Furthermore, the SEC’s allegations lack sufficient detail to prove Coinbase acted as a broker. Judge Katherine Polk Failla has shown skepticism towards the SEC’s stance. Overall, it seems likely that Coinbase will successfully dismiss the lawsuit and emerge victorious.
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