Coinbase’s court filing stated, “None of the assets the SEC has now identified are in fact securities, and for that and other reasons, secondary transactions in those assets are also not securities. Nor are Coinbase’s staking services a securities offering.”
Coinbase slammed the SEC’s accusations by claiming that the regulatory agency holds no jurisdiction over the cryptocurrencies on its exchange.
Earlier in June, the SEC filed a lawsuit against Coinbase on allegations of unlawfully offering crypto securities to its US clients.
In the court filing, Coinbase highlighted that the cryptocurrencies offered on its platform cannot be considered securities. This is because the issuers of the tokens offered by Coinbase hold no obligations to their investors, thus excluding the tokens from the definition of an investment contract.
Coinbase’s filing also emphasized the exchange’s efforts in maintaining compliance with multiple regulators. According to Coinbase, it has serviced US clients for many years under a BitLicense from NYDFS and holds money transmitter licenses issued by 45 states. The filing also stated that the exchange acquired a registered broker and activated an alternative trading system in hopes of participating in the market for crypto securities.
Moreover, Coinbase drew attention to the SEC’s stance on crypto regulation over the past year. According to the exchange, the SEC has “dramatically” expanded the definition of investment contracts. Citing the SEC’s lawsuits against Kraken, Binance, Bittrex, and Binance.US, Coinbase asserted that the regulatory agency prioritizes enforcement over rulemaking. It added,
“Confronted with the SEC’s improper claims of authority to fill the existing regulatory gap, federal courts have acknowledged the confusion the SEC has created for market participants.”
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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