4-8-2023 (CALIFORNIA) Cryptocurrency exchange Coinbase has filed a request with a federal judge in Manhattan to dismiss the U.S. Securities and Exchange Commission’s (SEC) lawsuit accusing the company of violating federal securities laws.
In the filing, Coinbase argued that the SEC lacked the authority to pursue the lawsuit, as the digital assets and services in question did not fall under the category of securities.
“Our core argument is simple – we do not offer ‘investment contracts’ as that term has been construed by decades of Supreme Court and other binding precedent,” stated Paul Grewal, Coinbase’s Chief Legal Officer, in a post on X, formerly known as Twitter.
The SEC has not yet responded to Coinbase’s filing.
The SEC filed the lawsuit against Coinbase in June, alleging that the exchange was operating illegally as a national securities exchange, broker, and clearing agency without proper registration with the regulator.
Tensions between the crypto sector and the top U.S. markets regulator have been on the rise, with a series of lawsuits filed by the SEC against some of the world’s largest crypto platforms.
While the SEC has argued that these platforms should register and operate similar to those dealing in traditional securities like stocks or bonds, the crypto industry insists that new legislation is needed to address the unique nature of digital assets.
Recent cases involving the SEC’s lawsuits against crypto firms Ripple Labs and Terraform have resulted in differing opinions from federal judges in Manhattan, highlighting the ongoing debate over the regulator’s authority in regulating the cryptocurrency sector.
