Coinbase Faces SEC in Court: Lawsuit Outcome Could Alter U.S. Crypto Landscape
Summary:
Coinbase, a leading cryptocurrency exchange, is set to appear in a New York court against the U.S. Securities and Exchange Commission (SEC), seeking the dismissal of a lawsuit accusing it of breaching federal security laws. The SEC asserts 13 tokens listed on Coinbase are securities. Jeremy Hogan, a partner at Hogan and Hogan, states that dismissals for such cases infrequently occur, but Judge Katherine Polk Failla, overseeing this case, is known for dismissing similar crypto cases in the past. The lawsuit and potential ruling could have significant implications for several cryptocurrencies in the U.S. market, representative of the SEC's wider crackdown on crypto firms.
The cryptocurrency trading platform, Coinbase, is due for a court hearing alongside the U.S Securities and Exchange Commission (SEC) to secure a ruling on the future of their legal dispute. This hearing is set to take place at an expected time of 10 am ET, or 3 pm UTC, on the 17th of January, in a New York courthouse. The purpose of this meeting is to address Coinbase's request to dismiss the lawsuit filed by the SEC. The claim initiated by the SEC on June 6, 2023, accuses Coinbase of breaching federal security laws.
The SEC posits that 13 of the tokens listed on Coinbase including Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), The Sandbox (SAND), Axie Infinity (AXS), Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), NEAR (NEAR), Voyager (VGX), Dash (DASH), and Nexo (NEXO), are securities. Insights from Jeremy Hogan, a partner at Hogan and Hogan, reveal that dismissals of cases like these don't usually occur, even though judge Katherine Polk Failla, known for dismissing cryptocurrency cases, is presiding over the hearing. She previously dismissed a suit against Uniswap that accused them of trading "scam tokens" back in 2013.
Coinbase's defensive strategy involves questioning the SEC's jurisdiction over cryptocurrency platforms and highlighting the fact that during their registration approval in April 2021, the SEC never advised on the necessity of registering as a security exchange. Hogan suggests that Coinbase might win the case even though such lawsuits are seldom dismissed by U.S courts.
The Judge's prior dismissal of the case involving Uniswap, her grasp of the technology, her ruling that Ethereum is a commodity and her belief that Congress should have a role in this procedure has left Hogan, as well as others in the crypto industry, eager to see the proceedings. MetaLawMan, a crypto-legal expert, refrained from giving any prediction on the ruling but did note the Judge would likely challenge the SEC's lawyers with some tough questions.
This case forms part of the SEC's clampdown on cryptocurrency firms, a move that began with the collapse of FTX in November 2022. The outcome of the lawsuit could seal the fate of several cryptocurrencies in the U.S. Similar to the Binance case, the SEC has requested the court to regard their recent ruling on Terraform Labs which concluded that the company sold securities without acquiring registration. Following the SEC's perspective, this ruling added further validity to their charges against crypto exchanges.
Published At
1/17/2024 6:25:19 PM
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