SEC Urges Judge to Reject Coinbase’s Motion to Dismiss Lawsuit
The US Securities and Exchange Commission (SEC) has requested a federal judge to deny Coinbase’s motion to dismiss the regulator’s lawsuit against the popular cryptocurrency exchange, according to a Reuters report. The SEC is disputing Coinbase’s reliance on a recent court ruling involving Ripple Labs, citing a different ruling in the Terraform Labs case.
Scrutiny Over Coinbase’s Role as an Exchange
The SEC’s filing highlights its intention to use the Terraform Labs ruling to question the court’s decision in the Ripple case. In June, the SEC sued Coinbase, accusing the exchange of operating unlawfully as a national securities exchange, broker, and clearing agency without proper registration.
Coinbase responded by seeking the dismissal of the case in August, arguing that the SEC lacked jurisdiction since the assets and services in question did not meet the criteria for securities.
However, the SEC argues that Coinbase facilitated transactions involving investment contracts and securities. The agency claims that each crypto asset issuer enticed investors with the expectation of increasing their investment value based on plans to develop and maintain the asset’s value.
Coinbase CLO Counters SEC With Pokemon Card Comparison
Coinbase’s Chief Legal Officer, Paul Grewal, responded to the SEC’s filing on Twitter, dismissing it as “more of the same old same old.” Grewal also argued that the SEC’s arguments could imply that items like Pokemon cards and stamps could be deemed securities.
Grewal emphasized that assets listed on Coinbase are not securities and fall outside of the SEC’s jurisdiction. He criticized the SEC’s enforcement-focused regulatory approach and called for clear rules and regulations for cryptocurrencies.
Implications for the Industry
The outcome of this case will have significant implications for the cryptocurrency industry, affecting how digital asset platforms operate and comply with securities laws.
Hot Take: SEC Rejects Coinbase’s Motion to Dismiss Lawsuit
The US Securities and Exchange Commission (SEC) has urged a federal judge to reject Coinbase’s motion to dismiss the regulator’s lawsuit against the prominent cryptocurrency exchange. The SEC disputes Coinbase’s reliance on a recent court ruling involving Ripple Labs, emphasizing a subsequent ruling in the Terraform Labs case that differs in reasoning.
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