Coinbase To Challenge SEC Lawsuit
Coinbase has announced plans to file an order seeking the dismissal of the lawsuit brought against it by the U.S. Securities and Exchange Commission (SEC) on August 4. The SEC had filed the lawsuit on June 6, accusing Coinbase of selling unregistered securities and operating as an unregistered securities exchange.
Coinbase plans to file an order seeking dismissal of the lawsuit by the Securities and Exchange Commission on Aug. 4. Coinbase will be moving the court for an order dismissing the case in its entirety. Coinbase Chief Legal Officer Paul Grewal expressed confidence the exchange…
— Wu Blockchain (@WuBlockchain) August 4, 2023
Legal Battle with SEC
On its earnings call held on August 3 for the second quarter of 2023, Coinbase’s Chief Legal Officer, Paul Grewal, expressed confidence that the exchange would emerge victorious in the legal battle against the regulatory body. He stated, “With respect to the litigation with the SEC, I want to be very clear. We do think we can win. We expect to win.”
Coinbase’s legal team will base its argument on several grounds. First, it will assert that the exchange did not list securities on its platform. Second, it will challenge the regulatory authority of the SEC over cryptocurrency exchanges, contending that such jurisdiction does not exist. Lastly, Coinbase will point out that the SEC never communicated any requirement to register when the exchange’s registration statement was declared effective back in April 2021.
6/13/23, Ltr to the 3d Circuit: "The Commission has not yet decided what action to take on that petition."
Today: “We can get to crypto later.”
Is there any serious question that a decision was made to deny sensible rules but deliberately withheld from the public?…
— paulgrewal.eth (@iampaulgrewal) August 3, 2023
Quest for Clarity
According to Grewal, Coinbase aims to have its arguments fully submitted and considered by the court by the end of October. The exchange has been striving for regulatory clarity in its dealings with the SEC and the U.S. government as a whole. Grewal emphasized that their goal is not just to prevail in this specific lawsuit, but to attain overall regulatory clarity for the cryptocurrency industry in the country.
Related: Binance Launches BTC/FDUSD And ETH/FDUSD Pairs
The lack of a clear legal framework has been a pressing issue in the cryptocurrency space. Grewal cited the conflicting statements from two top U.S. financial regulators as an example. While SEC Chair Gary Gensler has previously asserted that all cryptocurrencies, excluding Bitcoin, are securities, Commodity Futures Trading Commission Chair Rostin Behnam referred to Ether as a commodity during a March Senate hearing. Grewal argued that the existing laws that govern the industry were crafted before the advent of the internet and are not adequately suited to address the complexities of digital assets. He stressed that achieving regulatory clarity is vital to provide a stable and conducive environment for the growth of cryptocurrencies and related businesses.
