According to a June 28 report, cryptocurrency exchange Coinbase has filed a motion to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit against the company for “abnormal abuse of procedure.” filing.
SEC “change of attitude”
In its filing, Coinbase attributed the SEC lawsuit to a change in the regulator’s approach to the cryptocurrency industry.
Financial regulators have approved the company’s move to go public, the exchange said. April 2021 At that time, it did not suggest that the business should be registered and did not classify the listed assets as securities.
Coinbase took note of SEC Chairman Gary Gensler’s testimony before Congress in May 2021, which allegedly admitted that the commission lacked legal authority to regulate companies like Coinbase.
The exchange emphasized that, according to their interpretation, Gensler specifically stated that only Congress has the authority to address regulatory gaps in the operation of cryptocurrency exchanges.
Coinbase claimed in its filing that the SEC “by statute, arbitrarily, and without congressional order” changed its position within two years, confusing market participants with its unexpected turn. .
deny securities allegations
In its filing, Coinbase clarified that it does not list securities and that its staking service does not constitute a securities product.
Coinbase listed 6 of the 12 crypto assets classified as securities by the SEC prior to its 2021 listing, and financial regulators did not classify these assets as securities at the time. It revealed that. Coinbase takes the following view:
“None of the assets currently identified by the SEC are in fact securities, and for that and other reasons, secondary transactions in these assets are also not securities.”
Furthermore, the exchange said that since there is no “investment contract”, the fees earned on the staking service are for management and IT services and not due to the expertise and efforts of the management. He added that the company does not determine staking rewards.
“Coinbase has determined that its staking services constitute securities, that its staking services in any way violate U.S. securities laws, or that it has deprived customers of material information regarding those services. is denied.”
Coinbase Wants Lawsuit Dismissed
In its filing, Coinbase is asking the court to preemptively dismiss the SEC charges and rule in favor of the SEC on all allegations.
“The SEC’s allegations are wholly unfounded. Its legal position is still evolving and is based on a novel, non-textual and contextual interpretation of the term ‘investment contract’ in federal securities law. This is in stark contrast to SEC officials’ public acknowledgment of the limits of the agency’s statutory powers. “
the term “with prejudice” means that the lawsuit will be permanently dismissed.
An article showing Coinbase’s move to dismiss the SEC accusation described this as “an unusual abuse of the process,” first appearing on CryptoSlate.