On July 7, america Securities and Alternate Fee (SEC) submitted a letter to the choose of their case in opposition to Coinbase, responding to the trade’s request for permission to file a movement for judgment on the pleadings. Therein, the SEC knowledgeable the presiding choose that they don’t have any objections to Coinbase’s movement.
SEC versus Coinbase case replace
Particularly, the regulator needs to not delay the consideration of the problems raised by Coinbase, which may result in a well timed decision of the case.
The SEC outlines the arguments it plans to current in opposition to Coinbase within the letter. Nonetheless, the energy of those arguments, analysts previewed, is weak.
As an example, the SEC cites the LBRY case as supporting its place. Nevertheless, it’s essential to notice that the choose in that lawsuit didn’t conclude that tokens traded on the secondary market are securities.
Moreover, the SEC references a case from Connecticut that’s not immediately relevant because it concerned a token issuer as a substitute of a cryptocurrency trade.
The SEC doesn’t handle the testimonial proof from Gary Gensler that Coinbase introduced in its letter. Gensler testified in Might 2021 that the SEC lacked authorized authority over crypto exchanges and that there was no regulatory framework for crypto exchanges inside the SEC.
The SEC intends to file a movement to strike Coinbase’s protection based mostly on the Main Questions Doctrine, however the chance of this movement succeeding may be very low.
It’s anticipated that Coinbase will in the end prevail on the Main Questions Doctrine argument both on the district courtroom degree or by way of an enchantment.
Through the pre-motion convention on July 13, a schedule for briefing on Coinbase’s movement for judgment on the pleadings is predicted to be established.
A blow to the SEC?
The SEC’s current letter will be seen as a setback for them, however it’s not a significant hurdle to beat. Regardless of having just a few arguments to current in opposition to Coinbase, they’re not significantly sturdy.
Coinbase can view the SEC’s resolution to not oppose their movement for judgment on the pleadings as a optimistic improvement.
The case could also be resolved extra shortly, which is helpful for Coinbase.
In early June, the SEC sued Coinbase and Binance, two of the world’s largest cryptocurrency exchanges, for facilitating what the regulator alleges is the buying and selling of unregistered crypto securities.
In response, Coinbase mentioned it could vigorously defend itself in courtroom.