Coinbase (NASDAQ:COIN), the cryptocurrency exchange, has filed a motion to dismiss a case brought against it by the Securities and Exchange Commission (SEC), arguing that the regulator has overstepped its jurisdiction. The move, which took place on Monday, is the latest in a series of legal disputes between the crypto platform and the SEC.
The case centers around the SEC's classification of cryptocurrencies listed on Coinbase as securities. Coinbase has objected to this broad definition, accusing the SEC of power abuse and infringing on powers that Congress holds. The company insists that its listed cryptocurrencies fall outside of the regulator's jurisdiction.
This dispute began on June 6 when the SEC launched a lawsuit against Coinbase for alleged breaches of U.S. securities laws due to listing tokens without proper registration. In response, on June 29, Coinbase filed a motion accusing the SEC of violating its due process rights.
In an October 3 rebuttal to Coinbase's dismissal motion, the SEC maintained its stance that several cryptocurrencies listed by Coinbase were indeed investment contracts under the Howey test. This legal battle underscores the struggle to define cryptocurrency regulation in the U.S., highlighting the complexity of this issue and the need for legal clarity in this evolving space.
The North American Securities Administrators Association has shown support for the SEC's position and submitted an amicus brief urging not to treat digital assets as special. The case is currently overseen by Judge Katherine Polk Failla, who recently dismissed a similar class action lawsuit against Uniswap Labs, Paradigm, and Andreessen Horowitz.
Paul Grewal, Coinbase’s chief legal officer, echoed these sentiments, challenging the SEC's interpretation of investment contracts as overly broad. He argues that the major questions doctrine applies in this case.
The case may proceed to oral arguments before a judgment is issued. As it stands, this legal dispute exemplifies the ongoing struggle to define cryptocurrency regulation in the U.S., underscoring the urgent need for legal clarity in this rapidly evolving space.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.