SEC Rails Against Coinbase, Reaffirms Jurisdiction on Securities
In the latest showdown between the U.S. Securities and Exchange Commission (SEC) and Coinbase, the SEC has fired back at the exchange’s criticisms of its actions in the crypto space. Here’s the breakdown:
– SEC stands its ground: The SEC reaffirms its authority over securities cases, stating that its legal action against Coinbase is within its rights to enforce statutory requirements. This contradicts Coinbase’s claims that the SEC lacks the power to regulate digital asset exchanges.
– Howey test under attack: Coinbase tries to deconstruct the Howey test, which determines if transactions are subject to securities laws. However, the SEC argues that Coinbase’s assumptions about the test are incorrect.
– Major questions doctrine criticized: Coinbase’s use of the major questions doctrine, which gives Congress regulatory power over administrative agencies, is also called into question by the SEC. The agency asserts that it has the authority to pursue violations of securities laws.
– Change of heart ignored: The SEC fails to address SEC Chair Gary Gensler’s change of stance on the agency’s authority to regulate businesses like Coinbase. This inconsistency has not gone unnoticed.
In response to the SEC’s filing, Coinbase’s CLO Paul Grewal dismisses it as more of the same. It seems this battle is far from over.
Hot Take: The SEC’s response to Coinbase’s criticisms shows a firm commitment to its authority over securities. However, the lack of acknowledgement regarding Gensler’s change of heart raises questions about the agency’s consistency. This ongoing clash between the SEC and Coinbase highlights the challenges faced by regulators in dealing with the rapidly evolving crypto industry.
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