• The SEC filed a lawsuit against Coinbase alleging that it ran an unregistered securities exchange, broker and clearing agency.
• Coinbase has responded to the complaint by stating that the SEC had approved its IPO in 2021 and questioning the regulator’s authority and classification of digital assets.
• The crypto exchange plans to file for dismissal of the case, arguing that Congress alone has the authority to regulate crypto exchanges.
SEC Lawsuit Against Coinbase
The U.S. Securities and Exchange Commission (SEC) set off a legal battle with Coinbase earlier this month when it alleged that the crypto exchange had run an unregistered securities exchange, broker, and clearing agency, labeling several of its listed assets as unregistered securities. Furthermore, the agency asserted that a cross-section of Coinbase’s services such as staking service violated securities laws.
Coinbase Moves To Dismiss Case
In response to the SEC’s complaint on Wednesday June 28th, Coinbase issued their intent to file for dismissal of the case. They argued that they were approved for their initial public offering in 2021 without ever mentioning registering their business as required by SEC regulation. Additionally they noted how chair Gary Gensler testified around the same time claiming that there was no statutory authority for regulating crypto exchanges only Congress could fill this gap in legislation.
Coinbase Disagrees With Asset Classification
Coinbase also took issue with how the SEC classified some of its listed assets as securities when they believe this is not accurate according to their own research about these digital assets which would require new legislation from Congress if true.
Why The Legal Battle Matters
This legal battle between Coinbase and the SEC matters because it’s a test case which will determine how much power federal regulators have over cryptocurrencies like Bitcoin or Ethereum which are currently largely unregulated compared to other financial markets like stocks or commodities trading where there are established rules and regulations . If regulators win this case then expect more stringent regulations on cryptocurrencies going forward while if Coinbase wins then it could be seen as precedent setting ruling showing federal agencies have limited powers over digital currencies at least until new laws are passed by Congress giving them more control .
This is shaping up to be an important court battle between two powerful forces in America – big government versus cryptocurrencies which will either lead to greater regulation of digital currencies or leave them largely unregulated until new laws can be passed by lawmakers . Ultimately , whichever side prevails will shape future market conditions for years to come so watch closely what happens next in this ongoing saga .