SEC Counters Coinbase's Request for Interim Appeal in Ongoing Securities Case
Summary:
The U.S. Securities and Exchange Commission (SEC) has countered Coinbase's request for an interim appeal in their ongoing case, accusing the crypto exchange of attempting to distort a critical question's interpretation. The SEC maintains that despite Coinbase's push for a new legal test and disagreement with the court's decision, there is no compelling reason to certify an early review. Other contentions include Coinbase's purported dissatisfaction with current securities regulation and their alternative definition of an "investment contract.". The SEC sued Coinbase in June 2023 for listing 13 tokens they allege were securities. Coinbase refutes these claims, stating its trades fall outside SEC's jurisdiction.
In a recent development, the United States Securities and Exchange Commission (SEC) has rejected Coinbase's appeal for an interim review pertaining to a crucial query in an ongoing case, accusing the cryptocurrency exchange of trying to unfairly influence the interpretation of the question at hand. In a filing to the Southern District of New York federal court on May 10, the SEC stated, “Coinbase is trying to mold the appeal question to fit it into the certifiable question category under 28 U.S.C. § 1292(b), a move that is counterproductive.”
Furthermore, the federal agency indicated Coinbase's dissatisfaction with its Howey Test, a benchmark for identifying securities, and the existing securities regulation framework, as the company sees working within these parameters as costly. The SEC stated, "Coinbase just doesn't accept the reality. It cannot protest about the consequences it brought on itself."
On April 12, Coinbase had lodged an interim appeal asserting that a post-sale obligation is a necessity for an investment contract to exist. The SEC disagrees with this notion, leading Coinbase to argue that the view taken by the SEC on this matter is a crucial legal point that has the potential to affect the lawsuit outcome greatly.
However, the SEC counters this claim, stating that Coinbase identifies this as a crucial query only because it lacks a clear definition of what an "contractual commitment" entails. The agency said that Coinbase couldn't put forth a clear and cohesive version of this rationale, which the company now claims is a critical point.
In the court filing, the SEC pointed out that no court in eight decades has ever called for "contractual obligations" after a sale’s completion. It said, “Just because Coinbase introduces a new legal test and opposes the court's denial of that test doesn't necessitate an interim review.”
The commission added, “The fact that Coinbase wants to do so, and wishes to redefine established legal precedents dating back decades to suit its own strategic objectives and operational needs, provides no persuasive reason for authorizing an early appeal in this case.”
In a related development, a new lawsuit has been lodged against Coinbase over purportedly misleading investors. The SEC sued Coinbase in June 2023, alleging that by listing 13 tokens it claimed were securities, the crypto exchange had violated federal securities regulations.
The company retorted, stating that the transactions on its platform do not qualify as securities and fall outside the jurisdiction of the SEC. The SEC, however, strongly contests this claim: “Several transactions on Coinbase's platform and associated services are considered 'investment contracts,' a category that federal securities laws have identified as securities for a long time,” it articulated in court documents dated March 27.
Published At
5/11/2024 7:45:41 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.