The United States Securities and Exchange Commission (SEC) garners efforts to reinforce its June filed lawsuit against Coinbase. The company filed a motion in court to deny the charges and allegations. In a recent episode, the financial regulator asked the US federal court judge to reject the motion. The federal judge is yet to decide the further course of action while Coinbase reiterated a similar stance.
In the filing with a New York District Court on Tuesday, October 3rd, the SEC asked for dismissal of the motion filed earlier by Coinbase seeking rejection of the lawsuit against it. The financial regulator also repeated the claim that several cryptocurrencies listed on the cryptocurrency exchange platform are securities. It stated that the assets fell under the Howy Test and so were investment contracts that needed to be registered with the SEC.
Furthermore, the securities regulator added that the US crypto exchange knew that the cryptocurrencies offered over the platform were securities. These assets meet the Howey Test conditions and according to the SEC, the company affirmed this while filing.
Coinbase Filed Motion Against SEC’s Lawsuit
The recent development is in the lawsuit filed by the SEC against Coinbase in June this year. The financial watchdog alleged that the exchange offered the unregistered securities.
Coinbase initially responded by denying the allegations on public forums. By the end of June 2023, it filed a motion with the court calling out the regulatory actions against it.
Coinbase took a notable legal action on Thursday, June 28, when it filed a motion with the United States District Court for the Southern District of New York. In this document, Coinbase expressed concerns regarding the Securities and Exchange Commission (SEC)’s interpretation of securities laws.
The filing emphasized its belief that the SEC was exceeding its regulatory authority, sparking a legal dispute over the application of securities regulations within the cryptocurrency space.
In its argument, the crypto exchange contended that the application of securities laws by the SEC to various cryptocurrencies is not in alignment with the existing regulatory framework.
In other words, Coinbase is challenging the SEC’s interpretation and enforcement of securities regulations, asserting that it deviates from the established rules and guidelines governing the cryptocurrency industry. This dispute highlights the ongoing debate and legal scrutiny surrounding the classification and regulation of cryptocurrencies in the United States.
The regulatory authority, in the recent filing, responded to Coinbase’s legal argument invoking the “major questions doctrine,” and dismissed the claim raising questions on SEC’s authority. Coinbase had asserted that the SEC lacks authority over the cryptocurrency market until Congress explicitly grants it.
However, the regulatory body has rejected this perspective, setting the stage for a legal dispute over the scope of the SEC’s jurisdiction and the role of Congress in regulating the crypto industry.