A Bloomberg Analyst Predicts Coinbase’s Chances of Winning SEC Lawsuit
A Bloomberg intelligence analyst believes that Coinbase, a leading US-based crypto exchange platform, has a 70% chance of winning a motion to dismiss the lawsuit filed against it by the US Securities and Exchange Commission (SEC). The analyst, Elliott Stein, initially thought that Coinbase would only be able to dismiss the SEC’s accusations related to trading law violations, but not the other claims. However, after attending a court hearing on the matter, Stein now believes that Coinbase will likely win a full dismissal.
Why Does Coinbase Have a High Chance of Winning?
Stein found Coinbase’s definition of “investment contract” more convincing compared to the SEC’s definition. He believes that this definition will also help Coinbase defeat the regulator’s other claims. The analyst suggests that sales of digital assets on public exchanges do not fit neatly into the existing legal framework for determining what constitutes an investment contract. Even if the case proceeds, Stein predicts that it will eventually reach the Supreme Court, which is likely to narrow down the criteria. Furthermore, Coinbase presented strong arguments against the SEC’s allegations regarding its broker functions.
Background on Coinbase’s Lawsuit
The SEC sued Coinbase in June 2023 for allegedly violating securities laws, including selling unregistered securities and operating as an unregistered exchange/broker agency.
Hot Take: A Favorable Outcome for Coinbase
Bloomberg analyst Elliott Stein believes that there is a 70% chance that Coinbase will successfully have the SEC lawsuit dismissed. He points to Coinbase’s compelling definition of “investment contract” and its strong arguments against the regulator’s claims. Stein suggests that even if the case reaches the Supreme Court, it is likely to result in a narrower interpretation of what constitutes an investment contract. This could have significant implications for the broader crypto industry and its regulatory landscape.
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