US Court Hearing in SEC vs. Coinbase Case Takes a Turn
In a highly anticipated court hearing on January 17, the ongoing legal battle between the US Securities and Exchange Commission (SEC) and Coinbase, the US-based cryptocurrency exchange, took a dramatic turn. Coinbase argued that the tokens traded on its platform should not be considered securities, which could positively impact the entire crypto community if the case turns out to be a win for the exchange.
Judge Shows Favorable Leanings Towards Coinbase
The SEC filed a lawsuit against Coinbase in June, alleging that the exchange facilitated trading of several crypto tokens that should have been registered as securities. The SEC accused Coinbase of operating illegally without registering with the regulatory body. Judge Failla demonstrated a keen interest in the case and seemed to lean in favor of Coinbase. She commended an amicus brief submitted by the decentralized finance (DeFi) community for its superior explanation of staking and wallet usage compared to the SEC’s briefing.
Judge Failla Skeptical Of SEC’s Claims
The hearing also delved into collectibles, with Judge Failla expressing caution about implicating commodities or other non-security assets. The SEC lawyer contended that the key distinction between tokens and collectibles lies in the enterprise or network associated with the tokens. In a moment of skepticism, Judge Failla ridiculed the SEC lawyer’s use of the term “strict liability” to argue that Coinbase should have known it was offering unregistered securities.
Implications for Cryptocurrency Regulation
The hearing outcome remains uncertain, but Judge Failla’s probing questions and skepticism toward the SEC’s arguments indicate a potential shift in favor of Coinbase. This case could set a precedent for how cryptocurrencies are regulated and classified as securities in the United States.
Featured image from Shutterstock, chart from TradingView.com
Source: Bitcoinist
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