A federal judge in Manhattan has given permission for the US Securities and Exchange Commission (SEC) to prosecute Coinbase. While the court dismissed one of the regulator’s claims, the latest ruling paves the way for a potentially lengthy legal battle. The decision marks a significant development in the regulatory scrutiny facing digital asset companies, Reuters Reported.
U.S. District Judge Catherine Failla partially granted Coinbase’s motion to dismiss the SEC’s lawsuit alleging violations of securities rules. Despite this partial victory, the decision largely aligns with the SEC’s approach to regulating cryptocurrencies, echoing previous rulings in favor of the regulator.
Coinbase’s Chief Legal Officer, Paul Grewal, expressed the exchange’s readiness for the ruling and reiterated its commitment to fighting the SEC’s claims. Despite this setback, Coinbase has expressed optimism in its legal arguments and plans to prove its position in court.
The SEC’s lawsuit against Coinbase, which began in June, alleges that Exchange
Exchange
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities and other financial instruments. Typically, an exchange is accessed through a digital platform or sometimes at a physical address where investors organize to trade. Among the exchange’s main responsibilities will be to uphold honest and fair-trade practices. These are important to ensure that the distribution of security rates supported on that exchange is effective
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities and other financial instruments. Typically, an exchange is accessed through a digital platform or sometimes at a physical address where investors organize to trade. Among the exchange’s main responsibilities will be to uphold honest and fair-trade practices. These are important to ensure that the distribution of security rates supported on that exchange is effective
Read this term Facilitated trading of many crypto tokens that must be registered as securities. Additionally, the SEC claims that Coinbase illegally operated as a national securities exchange, broker and clearing agency without proper registration.
Judge Faillah’s ruling allowed most aspects of the lawsuit to move forward, except for the SEC’s claims that Coinbase acted as an unregistered broker through the wallet application. The legal battle marks a key moment in the SEC’s efforts to apply traditional securities laws to the rapidly evolving digital asset sector.
Implications for crypto markets
The definition of what constitutes a security in the context of crypto assets is at the center of a legal dispute. The SEC relies on established legal precedent, including decisions from the US Supreme Court, to determine whether certain crypto assets should be considered securities.
However, Coinbase claims that, unlike traditional securities, Cryptocurrency
Cryptocurrency
Virtual currencies, also known as cryptocurrencies, are nearly counterfeit-proof digital currencies built on blockchain technology, using cryptography. Consisting of decentralized networks, blockchain technology is not overseen by a central authority. Therefore, cryptocurrencies operate in a decentralized manner that theoretically protects them from government interference. The term cryptocurrency comes from the origin of encryption techniques used to secure networks.
Virtual currencies, also known as cryptocurrencies, are nearly counterfeit-proof digital currencies built on blockchain technology, using cryptography. Consisting of decentralized networks, blockchain technology is not overseen by a central authority. Therefore, cryptocurrencies operate in a decentralized manner that theoretically protects them from government interference. The term cryptocurrency comes from the origin of encryption techniques used to secure networks.
Read this term Don’t settle for just getting returns from the efforts of others. Judge Faillah’s decision favored the SEC’s argument, suggesting that some digital assets listed on Coinbase could be classified as securities.
Last year, the SEC rejected Coinbase Global’s petition for specific regulations in the digital asset sector. Despite Coinbase’s request for these rules, SEC Chairman Gary Gensler noted that existing rules are sufficient, citing inadequacies in current securities laws. He emphasized on the implementation of existing laws in the crypto market.
In a letter to Coinbase’s chief legal officer, Gensler claimed that current regulations are appropriate for the crypto industry. Gensler emphasized the compatibility of existing laws by citing the Supreme Court’s Howe test, which has been used in federal courts to effectively evaluate crypto assets.
A federal judge in Manhattan has given permission for the US Securities and Exchange Commission (SEC) to prosecute Coinbase. While the court dismissed one of the regulator’s claims, the latest ruling paves the way for a potentially lengthy legal battle. The decision marks a significant development in the regulatory scrutiny facing digital asset companies, Reuters Reported.
U.S. District Judge Catherine Failla partially granted Coinbase’s motion to dismiss the SEC’s lawsuit alleging violations of securities rules. Despite this partial victory, the decision largely aligns with the SEC’s approach to regulating cryptocurrencies, echoing previous rulings in favor of the regulator.
Coinbase’s Chief Legal Officer, Paul Grewal, expressed the exchange’s readiness for the ruling and reiterated its commitment to fighting the SEC’s claims. Despite this setback, Coinbase has expressed optimism in its legal arguments and plans to prove its position in court.
The SEC’s lawsuit against Coinbase, which began in June, alleges that Exchange
Exchange
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities and other financial instruments. Typically, an exchange is accessed through a digital platform or sometimes at a physical address where investors organize to trade. Among the exchange’s main responsibilities will be to uphold honest and fair-trade practices. These are important to ensure that the distribution of security rates supported on that exchange is effective
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities and other financial instruments. Typically, an exchange is accessed through a digital platform or sometimes at a physical address where investors organize to trade. Among the exchange’s main responsibilities will be to uphold honest and fair-trade practices. These are important to ensure that the distribution of security rates supported on that exchange is effective
Read this term Facilitates trading of many crypto tokens that must be registered as securities. In addition, the SEC claims that Coinbase illegally operated as a national securities exchange, broker and clearing agency without proper registration.
Judge Faillah’s ruling allowed most aspects of the lawsuit to move forward, except for the SEC’s claims that Coinbase acted as an unregistered broker through the wallet application. The legal battle marks a key moment in the SEC’s efforts to apply traditional securities laws to the rapidly evolving digital asset sector.
Implications for crypto markets
The definition of what constitutes a security in the context of crypto assets is at the center of a legal dispute. The SEC relies on established legal precedent, including decisions from the US Supreme Court, to determine whether certain crypto assets should be considered securities.
However, Coinbase claims that, unlike traditional securities, Cryptocurrency
Cryptocurrency
Virtual currencies, also known as cryptocurrencies, are nearly counterfeit-proof digital currencies built on blockchain technology, using cryptography. Consisting of a decentralized network, blockchain technology is not overseen by a central authority. Therefore, cryptocurrencies operate in a decentralized manner that theoretically protects them from government interference. The term cryptocurrency comes from the origin of encryption techniques used to secure networks.
Virtual currencies, also known as cryptocurrencies, are nearly counterfeit-proof digital currencies built on blockchain technology, using cryptography. Consisting of decentralized networks, blockchain technology is not overseen by a central authority. Therefore, cryptocurrencies operate in a decentralized manner that theoretically protects them from government interference. The term cryptocurrency comes from the origin of encryption techniques used to secure networks.
Read this term Don’t settle for just getting returns from the efforts of others. Judge Faillah’s decision favored the SEC’s argument, suggesting that some digital assets listed on Coinbase could be classified as securities.
Last year, the SEC rejected Coinbase Global’s petition for specific regulations in the digital asset sector. Despite Coinbase’s request for these rules, SEC Chairman Gary Gensler noted that existing rules are sufficient, citing inadequacies in current securities laws. He emphasized on the implementation of existing laws in the crypto market.
In a letter to Coinbase’s chief legal officer, Gensler claimed that current regulations are appropriate for the crypto industry. Gensler emphasized the compatibility of existing laws by citing the Supreme Court’s Howe test, which has been used in federal courts to effectively evaluate crypto assets.