In
a court hearing scheduled for Wednesday, Coinbase, is set to argue that the
US Securities and Exchange Commission (SEC) should drop its case against the
platform. Coinbase contends that the tokens traded on its platform are not
comparable to securities, and therefore, the SEC’s regulatory overreach should
be dismissed.
This
court battle is closely monitored by the crypto community, as it could provide
clarity on the SEC’s jurisdiction over the digital assets sector. Coinbase’s
primary argument revolves around the assertion that the SEC is overreaching its
authority and that the assets listed on its platform are not securities,
differentiating them from traditional stocks or bonds.
The
SEC filed a lawsuit against Coinbase in June, alleging that the exchange
facilitated the trading of at least 13 crypto tokens that should have been
registered as securities. The regulatory body also accused Coinbase of
operating illegally as a national securities exchange, broker, and clearing
agency without proper registration.
One
particular point of contention is Coinbase’s “staking” program, where
the platform pools assets to verify activity on blockchain networks and rewards
customers. The SEC claims that this program should have been registered with
the agency.
⚠️ COINBASE, SEC SET TO FACE OFF IN FEDERAL COURT OVER REGULATOR’S CRYPTO AUTHORITY
(Reuters)Coinbase will argue at a court hearing on Wednesday that the U.S. securities regulator should drop its case against it because the tokens traded on its crypto exchange are not akin to… pic.twitter.com/SvAbqSMynS
— PiQ (@PiQSuite) January 17, 2024
Coinbase
Draws Inspiration from Ripple Labs Case in SEC Lawsuit
Coinbase is not alone
in challenging the SEC’s stance. Other cryptocurrency
firms share similar views, collectively arguing that most tokens do not meet
the definition of a security and that legislation is necessary to regulate the
industry.
In
August, Coinbase sought to dismiss the SEC’s lawsuit, citing a separate case
involving Ripple Labs, where a judge found that the company did not violate
federal securities law by selling its XRP crypto token on public exchanges.
Coinbase considers this ruling a significant victory for the crypto sector.
However, the SEC
maintains that its case against Coinbase should proceed, pointing to a
different court ruling in the case of crypto developer Terraform Labs, which
supported the regulator’s position.
In
a court hearing scheduled for Wednesday, Coinbase, is…
