• Coinbase is filing a motion to dismiss a lawsuit brought by the Securities and Exchange Commission (SEC) in June.
• Lawyers for Coinbase cited precedent from the SEC v. Ripple case, claiming that the SEC violated due process, abused its discretion, and abandoned its own earlier interpretations of the securities laws.
• The crypto firm has requested the court dismiss the case, arguing that the SEC’s enforcement action was “punitive” and represented an overreach in its authority granted by Congress.
Coinbase Files Motion to Dismiss Lawsuit
United States-based cryptocurrency exchange Coinbase has filed a motion to dismiss a lawsuit brought by the Securities and Exchange Commission in June. In an Aug. 4 filing with the U.S. District Court for the Southern District of New York, lawyers for Coinbase filed a motion for judgment, claiming the SEC had “violated due process, abused its discretion, and abandoned its own earlier interpretations of the securities laws” in asserting certain regulatory authority over the crypto exchange.
SEC Precedent Cited
The legal team cited precedent from the SEC v. Ripple case , in which a judge ruled that XRP ( XRP ) largely did not qualify as a security by the commission’s existing standards. Specifically, Coinbase’s filing disputed that transactions of 12 tokens at issue in this case met definition of “investment contracts” under Howey test and exchange was operating as unregistered broker, and argued commission’s challenges to its staking program “fail as matter of law.”
Coinbase Requests Court Dismissal
The crypto firm has requested court dismissal of case, arguing commission’s enforcement action was “punitive” and represented overreach in its authority granted by Congress. By ignoring said precedent, it argued SEC violated due process, abused discretion and abandoned own earlier interpretations on securities laws set out by Congress itself .
Lawsuits Filed Against Other Crypto Companies
In addition to Coinbase’s case ,the SEC is pursuing enforcement actions against Binance and Hex founder Richard Heart . U.S lawmakers recently passed legislation through committees that could restructure commission’s authority regarding digital assets , although details have yet to be released .
Conclusion
Coinbases’ recent motion to dismiss highlights some issues with how US regulators view digital assets , specifically whether they should be classified as securities or not . With more regulations set to be released soon hopefully we will see greater clarity on these matters moving forward .