Summary of the Article
• The SEC filed a lawsuit against Coinbase earlier this month for running an unregistered securities exchange, broker, and clearing agency.
• Coinbase has responded to the complaint by arguing that the SEC had approved its IPO in 2021 without mentioning any registration requirements.
• Coinbase also argued that the SEC lacked statutory authority to regulate crypto exchanges and questioned the classification of listed assets as securities.
SEC Files Lawsuit Against Coinbase
The United States Securities and Exchange Commission (SEC) set the stage for a legal battle with Coinbase earlier this month when it filed a case accusing the crypto exchange of running an unregistered securities exchange, broker, and clearing agency, labeling several of its listed assets as unregistered securities. The agency also asserted that a cross-section of Coinbase’s services, including its staking service, violated securities laws.
Coinbase Moves to Dismiss SEC Case
In response to the SEC’s complaint, Coinbase issued court documents dated Wednesday, June 28th revealing its intent to file for dismissal. The crypto exchange argued that the regulator had approved its initial public offering (IPO) in 2021 without ever mentioning that it had to register its business. Additionally, they pointed out that SEC Chair Gary Gensler had testified around the same time that the agency lacked statutory authority to regulate crypto exchanges and that Congress alone could fill such regulatory gaps.
Coinbase Denies Listed Assets Are Securities
In contrast to what was stated in their complaint, Coinbase maintained that none of their listed assets were considered unregistered securities by them or any other regulatory body at any point. Furthermore, they denied all allegations regarding their staking service being considered a security under applicable laws.
Coinbase Questions Authority & Classification
Notably, Coinbase raised questions about both the authority and classification of digital assets by the SEC in regards to their case against them. They pointed out inconsistencies between how their situation was handled compared to other similar ones involving traditional financial institutions like Goldman Sachs Group Inc., who received approval for their own cryptocurrency product without having been required to register it as a security first.
To summarize this article: The US Securities and Exchange Commission filed a lawsuit against crypto exchange platform Coinbase claiming various violations related to running an unregistered securities exchange and listing certain assets as unregistered securities while also alleging violations with respect to services such as staking services offered by them; In response Coinbase has sought dismissal on grounds questioning both authority & classification with arguments pointing out inconsistency between how similar cases were handled compared traditional financial institutions like Goldman Sachs Group Inc among others; Thus setting up an interesting legal battle ahead between these two parties which will be worth following closely given implications it may have beyond just this particular case alone .