The SEC Criticizes Coinbase’s Motion Against Ripple Decision
The US Securities and Exchange Commission (SEC) has opposed Coinbase’s motion for an interlocutory appeal, criticizing Judge Analisa Torres’s decision in the case against Ripple. The SEC argues that Coinbase should not seek to reexamine the application of securities law to digital assets.
SEC Disagrees with Coinbase’s Opposition to Howey Test
- Coinbase believes that the SEC’s application of the Howey test to cryptocurrency assets has created confusion regarding the definition of securities.
- The exchange heavily relies on Judge Torres’s ruling in the Ripple case, where XRP was deemed non-securities and its sales on exchanges were not considered investment contracts.
SEC Argues Against Coinbase’s Motion
- The SEC refutes Coinbase’s motion, stating that no court has followed Judge Torres’s decision.
- The regulator accuses Coinbase of trying to manipulate the interpretation of the issue by framing an interlocutory appeal around a “controlling question.”
SEC’s Response to Coinbase’s Appeal
- The SEC maintains that an interlocutory review is unwarranted simply because Coinbase proposes a new legal standard.
- The agency suggests that Coinbase may disagree with the established legal framework and now face challenges in complying with securities regulations.
Coinbase’s Chief Legal Officer’s Rebuttal
- Coinbase’s Chief Legal Officer, Paul Grewal, argues that the SEC’s motion contradicts itself.
- Grewal points out inconsistencies in the SEC’s arguments in a similar appeal against Ripple Labs.
Further Developments in the Legal Dispute
- The ongoing legal battle between the SEC and Coinbase advances with this filing.
- Previously, the SEC accused Coinbase of operating as an unregistered exchange and raised concerns about its staking program potentially violating securities laws.
Hot Take: Implications of SEC’s Critique on Coinbase
The SEC’s opposition to Coinbase’s motion for an interlocutory appeal raises questions about the application of securities law to digital assets. Coinbase’s disagreement with the Howey test and the SEC’s response highlight the ongoing uncertainty and challenges in the crypto industry.
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