“SEC Goes Far Beyond Existing Law,” Says Coinbase
In a development in the ongoing legal battle between Coinbase and the U.S. Securities and Exchange Commission (SEC), the exchange has filed a motion to dismiss the SEC’s complaint.
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Coinbase argues that the digital assets listed on its platform do not fall under the SEC’s jurisdiction and disputes the regulator’s claim that several cryptocurrencies offered on its platforms are unregistered securities.
Coinbase’s 177-page response, filed on Thursday, June 29, counters this claim by asserting that these cryptocurrencies do not qualify as investment contracts and, therefore, should not be classified as securities. The company points to the Supreme Court’s Howey case in support of its position.
According to Coinbase, the issuers of these tokens have no obligations to investors, underscoring the argument that transactions conducted on Coinbase’s secondary market are not securities. The value derived from these transactions lies in the assets themselves and not in the underlying companies that generated them.
Coinbase also highlights that SEC Chairman Gary Gensler has changed his position on the regulator’s powers over cryptocurrencies during his tenure, and notes Coinbase’s repeated calls for regulation. The motion also mentions that Congress has begun to explore the issue of crypto regulation.
Paul Grewal, Coinbase’s Chief Legal Officer (CLO), asserts that the SEC’s claims exceed the boundaries of established law and should be dismissed.
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