In a bold move to defend its position, Coinbase has formally requested the dismissal of the Securities and Exchange Commission's (SEC) lawsuit against the cryptocurrency exchange. Filed on Friday, Coinbase argues that the SEC's claims are baseless as the platform does not engage in trading securities.
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CRYPTO SHOWDOWN
In a bold move to defend its position, Coinbase has formally requested the dismissal of the Securities and Exchange Commission's (SEC) lawsuit against the cryptocurrency exchange. Filed on Friday, Coinbase argues that the SEC's claims are baseless as the platform does not engage in trading securities.
The SEC initiated legal proceedings against Coinbase in June, alleging that the crypto exchange violated securities laws by operating as an unregistered broker, exchange, and clearing agency. The regulatory body further accused Coinbase of selling unregistered securities through its staking-as-a-service program, which rewards users with crypto for participating in the proof-of-stake process on the blockchain.
In response, Coinbase staunchly refutes the SEC's allegations, contending that the case is beyond the scope of the agency's authority since the platform does not offer securities. This stance aligns with Coinbase's long-standing argument, articulated by Paul Grewal, the company's chief legal officer, who emphatically stated last year, "Coinbase does not list securities. End of story."
Paul Grewal, in a post announcing Coinbase's motion to dismiss, asserts that the SEC's actions constitute a violation of due process, an abuse of discretion, and a departure from the regulator's own prior interpretations of securities laws. He adds that the SEC has exceeded the defined limits of its authority set by Congress.
Despite these robust arguments, the SEC remains undeterred, as evidenced by its ongoing lawsuits against other entities. Binance, crypto influencer Richard Heart, and Tron founder Justin Sun have also faced SEC legal action, accused of allegedly selling unregistered securities.
As the legal battle between Coinbase and the SEC unfolds, the crypto industry watches closely, aware of the broader implications for regulatory clarity and the boundaries of the SEC's authority in the evolving landscape of digital assets.
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