Key takeaways :
- SEC calls on the court to reject Coinbase’s dismissal request, asserting that securities were indeed involved in the transactions.
- Coinbase contends that the SEC has not pinpointed transactions encompassing the buying and selling of securities.
The United States Securities and Exchange Commission (SEC) is standing its ground in the ongoing legal showdown with cryptocurrency exchange Coinbase.
In a filing dated October 3rd submitted to the New York District Court, the SEC has urged the judge to reject Coinbase’s request to dismiss the lawsuit. The SEC reiterated its stance that some of the cryptocurrencies listed on the exchange should be classified as securities according to the Howey Test.
In response, Coinbase had previously filed a motion to dismiss at the end of August, contending that the crypto tokens labeled as securities didn’t qualify as “investment contracts,” and that the SEC lacked regulatory authority in the realm of cryptocurrencies.
In its recent court filing, the SEC has put forth a four-point argument to demonstrate the sufficiency of its initial complaint, as outlined yesterday.
Additionally, the SEC alleges that Coinbase neglected to provide crucial information to its customers, including details about the associated risks and fees of these assets. In contrast, Coinbase insists that the assets it provides are not securities and are beyond the purview of the SEC’s regulatory authority.
Furthermore, Coinbase has contested the SEC’s jurisdiction over the cryptocurrency market by invoking the “major questions doctrine.” This doctrine posits that Congress must explicitly grant new powers to an agency before it can regulate a novel and uncharted domain.
The SEC stated that Coinbase is alleging that the SEC endorsed its actions that violated regulations when Coinbase went public. Coinbase also contends that the SEC does not possess the authority to oversee transactions involving crypto assets classified as securities.
The SEC further argued that Coinbase’s reliance on the major questions doctrine, which asserts that courts presume Congress doesn’t delegate significant political or economic decisions to executive agencies, and which Coinbase claims is relevant to its case, does not warrant a different outcome, according to the securities regulator.
