Experts Divided on Outcome of SEC Case Against Coinbase
Legal experts are split on the possibility of a New York judge dismissing the Securities and Exchange Commission’s (SEC) case against Coinbase. Last week, Judge Katherine Polk Failla heard arguments from both sides for over four hours. The SEC sued Coinbase last year, accusing it of operating as an unregistered exchange and broker. Coinbase has called for the case to be dismissed, claiming that the regulator is using a “regulation by enforcement approach.”
Coinbase’s Chances of Beating the SEC
Bloomberg Intelligence senior litigation analyst Elliott Stein believes there is a 70% chance that Coinbase will beat the SEC. Stein stated that even if the case continues, it may eventually reach the Supreme Court, where the definition of securities may be narrowed. He initially thought Coinbase had a better chance of winning regarding asset trading rather than staking and wallet services but was pleasantly surprised by Coinbase’s performance during the hearing.
Tough Questions from Judge Failla
Judge Failla posed tough questions to both the SEC and Coinbase during the hearing. She expressed concerns about the SEC’s definition of securities while also considering Coinbase’s arguments on wallet and staking claims. Stein believes that Judge Failla’s thorough questioning suggests a potential dismissal of some claims.
The Possibility of Dismissal
While some experts believe there is a chance for dismissal, others argue that it is unlikely at this stage. If the motion to dismiss is denied, the case will proceed to discovery, followed by possible motions for summary judgment before reaching trial.
The Binance Case
Binance also faced the SEC in court last week. The SEC sued Binance Holdings and its former CEO Changpeng Zhao in June, accusing the exchange of various violations. The outcome of this case is still uncertain, but Judge Amy Berman Jackson’s comments during the hearing suggest a potential dismissal of certain claims.
What’s Next
Legal experts anticipate that Judge Failla will make a decision on Coinbase in the coming weeks. With multiple cases against crypto exchanges happening in different courts across the country, it is possible that these issues will eventually make their way to the Supreme Court.
Hot Take: Outcome Uncertain, But Potential for Dismissal
Legal experts are divided on the outcome of the SEC’s case against Coinbase. While some believe there is a 70% chance that Coinbase will beat the SEC and have the case dismissed, others argue that dismissal is unlikely at this stage. Judge Failla’s tough questioning during the hearing suggests she may dismiss some claims, but it remains to be seen how she will rule. If any claims are dismissed, it could have significant implications for the crypto industry. Meanwhile, Binance also faced the SEC in court, and Judge Jackson’s comments indicate potential dismissals in that case as well. The decisions made by both judges will shape the future of cryptocurrency regulation.
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