In a high-stakes legal tug-of-war, Coinbase has requested judgment in their ongoing lawsuit against the formidable U.S. Securities and Exchange Commission, standing firm on their belief that the SEC has overstepped its boundaries.
This legal marathon took off in June when the SEC accused Coinbase of breaching federal securities laws. They alleged Coinbase operated as an unregistered broker, exchange, and clearing agency for cryptocurrencies that were deemed securities, pinpointing 13 tokens as representative samples of this regulation infringement.
In its counteraction, Coinbase isn’t pulling any punches. It refutes the SEC’s claims, highlighting the absence of investment contracts in the SEC’s list of tokens. According to Coinbase, the transactions taking place on their platform and Prime neither involve nor constitute contractual commitments exchanging future business profit, income or assets. Instead, Coinbase underscores these as simple commodity sales, where obligations are fulfilled upon the delivery of the digital token in return for payment.
Coinbase’s legal document further cites the SEC’s recent dealings with Ripple. Their claim? The underlying facts in both cases are almost mirror images of each other.
Additionally, Coinbase argues that allegations stating its staking and wallet services violate securities laws should be brushed aside for similarly convincing reasons. Also, in a throwback to a previous filing, the crypto giant yet again brings up the Major Questions Doctrine, flagging this lawsuit as a potential play to massively broaden the jurisdiction of the SEC to envelop the bustling world of the cryptocurrency industry.
As part of their well-articulated motion, Coinbase has attached a collection of 10 exhibits, including transcripts from the SEC’s legal tussle with LBRY and orders from cases that grappled with Howey Test questions in the past.
The SEC clocking is ticking, and they have until October 3, 2023, to respond, whereas any amicus briefs rallying behind Coinbase can put forward their case until August 11, 2023.
During an earnings call earlier this week, the cryptocurrency trailblazer signaled that they would move to dismiss the lawsuit. Driving home the resolute belief in their ability to win the case, Chief Legal Officer Paul Grewal emphasized their ultimate objective extends beyond just this legal dispute. He shed light on the more giant stride Coinbase is aiming for – regulatory clarity. The goal? A clear and comprehensive rulebook that not only secures consumers and fosters innovation, but also allows everyone in the ecosystem to understand and navigate the regulations effectively.