Key takeaways:
- SEC’s approach to the Green United case provides insights for Coinbase’s motion to dismiss, highlighting its strategy alignment.
- “Major questions doctrine” gains prominence in cryptocurrency legal battles, as evident from both Green United and potential Coinbase cases.
In the ever-evolving landscape of cryptocurrency and regulation, recent developments have brought the Securities and Exchange Commission (SEC) and Coinbase into the spotlight. The SEC’s Terraform ruling seems to hold significant clues regarding Coinbase’s approach to its dismissal motion strategy.
The recent legal maneuvers by the U.S. Securities and Exchange Commission (SEC) in its lawsuit against cryptocurrency miner Green United offer a glimpse into how the regulatory body might tackle its case against prominent crypto exchange Coinbase.
On July 31st, the SEC secured a significant victory when District Judge Jed Rakoff dismissed Terraform Labs’ motion to dismiss their case, effectively refuting all arguments grounded in the “major questions doctrine.”
Drawing parallels, Green United, a cryptocurrency miner, adopted the same argument in its own motion to dismiss the charges it faces. This doctrine has served as a pivotal defense strategy for various cryptocurrency defendants, Coinbase included, in their battles against the SEC.
Notably, Green United has relied on the same line of reasoning to seek dismissal, echoing previous cases involving the SEC, including those featuring Coinbase.
However, a recent filing on August 4th indicates that the SEC views the Terraform Labs ruling as a means to strengthen its stance against Green United’s reliance on the major questions doctrine and its fair notice defenses.
The SEC contended that the Terraform Labs decision sets a precedent that supports their position, indicating that it further substantiates their rebuttal of Green United’s defense arguments.
In its letter, the SEC asserted that the court’s rejection of the major questions doctrine and due process clause as barriers to the SEC’s allegations is pertinent to Green United’s case. The regulatory body stated, “Accordingly, Terraform Labs is relevant to this matter because it provides additional authority for rejecting Defendants’ ‘Major Questions Doctrine’ and fair notice defenses.”
Terraform, according to the judge in the SEC vs. Terraform case, “cannot wield a doctrine intended to be applied in exceptional circumstances as a tool to disrupt the routine work that Congress expected the SEC and other administrative agencies to perform.”
Other judgements have already been utilised by the SEC to strengthen its arguments in similar situations.
