Coinbase Urges Court to Dismiss SEC Case, Claiming Regulator ‘Overstepped’ Its Statutory Authority

In a question for judgement filed connected August 4, Coinbase deed backmost against the SEC’s suit alleging it facilitated unregistered trading of securities, arguing the bureau lacks authorization to modulate integer assets successful this way.

Coinbase Fights Back Against SEC’s Crypto Exchange Lawsuit

In a court filing submitted connected Friday, Coinbase contends the SEC’s claims trust connected an overbroad speechmaking of the word “investment contract” that departs from decades of precedent and statutory text. The crypto-centric institution says the SEC fails to allege the transactions facilitated connected its speech see immoderate contractual rights entitling buyers to aboriginal profits oregon income from issuers, an indispensable constituent of an concern contract.

Today, @coinbase filed our little asking the Court to disregard the SEC’s lawsuit against us. Our halfway statement is elemental — we bash not connection "investment contracts" arsenic that word has been construed by decades of Supreme Court and different binding precedent. 1/3 https://t.co/r2EkDgkEuc

— paulgrewal.eth (@iampaulgrewal) August 4, 2023

The question asserts the SEC’s mentation – that buyers of definite tokens expect profits based connected issuer efforts to boost the tokens’ usefulness – impermissibly treats these assets similar securities. Further, Coinbase invokes the large questions doctrine, nether which courts defer important regulatory actions to Congress absent wide authorization.

Coinbase argues the SEC is claiming immense authorization aft admitting it lacks this power, adjacent arsenic legislators actively statement apportioning crypto oversight.

“The SEC has violated owed process, abused its discretion, and abandoned its ain earlier interpretations of the securities laws,” the tribunal filing details. “But determination is simply a much cardinal occupation with its case—one the seat recognized 2 years agone and that entitles Coinbase to judgement connected the pleadings now: The taxable substance falls extracurricular the agency’s delegated authority.”

Additionally, Coinbase contests the SEC’s assertion it acted arsenic an unregistered broker by providing its wallet software. Coinbase argues the wallet is simply a passive instrumentality allowing users to store assets they control, not a means of effectuating transactions. The SEC’s allegation that Coinbase’s staking services are unregistered securities besides fails, Coinbase’s lawyers claim. The institution says Coinbase’s relation successful staking is simply technical, not managerial.

Overall, Coinbase paints the SEC’s enactment arsenic an unjustified, melodramatic reversal that defies the agency’s ain past positions and comes amid ongoing legislative efforts to modulate integer assets. It urges the tribunal to find the SEC transgressed its boundaries and disregard the case.

“The SEC has overstepped its statutory authority, and the lawsuit should accordingly beryllium dismissed,” Coinbase said. For the foregoing reasons, Coinbase is entitled to judgement connected the pleadings.”

What bash you deliberation astir Coinbase asking the tribunal to disregard the SEC lawsuit? Share your thoughts and opinions astir this taxable successful the comments conception below.