The US Securities and Exchange Commission (SEC) yesterday (Friday) foot Its response to Coinbase’s denial of its claims, stating that the cryptocurrency exchange “has realized that securities laws can apply to its behavior.” The SEC added that Coinbase “knew the rules to consider in assessing the legality of its behaviour” but decided to take a risk “in the name of growing its business”.
In early June, the Securities and Exchange Commission (SEC) took Coinbase to court, alleging that the leading cryptocurrency exchange in the US operated an unauthorized trading platform on which it offered 12 crypto tokens that are unregistered securities. It also alleged that Coinbase operates an illegal crypto storage service.
In response to a lawsuit filed by the SEC last month, Coinbase He said The SEC’s allegations “fall short of all merit,” adding that the regulator has no legal authority to oversee its actions. Coinbase’s listed digital assets are not ‘securities’ but ‘just an asset sale’, the exchange claimed, citing Howey’s test. The test is a legal doctrine used to determine whether a transaction will pass as an investment contract, which is a type of security.
However, in the face of Coinbase, the SEC claimed that the exchange published a “legal framework” for testing “as a basis for making listing decisions that it now claims do not apply to its activities.” The regulator further alleged that Coinbase “explicitly discourages” issuers of digital assets to avoid “problematic statements” that are “traditionally associated with securities” in their marketing materials.
Coinbase previously cited the SEC’s first statement on NASDAQ in April 2021 as evidence that it did not participate in unregistered securities. However, the watchdog in response also responded to this.
“Since going public, Coinbase has repeatedly informed its shareholders of the risks that crypto assets traded on its platform could be considered securities, and therefore its conduct could violate federal securities laws — including in the very filing statement it now refers to as evidence of That the SEC supposedly blessed its behavior.
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Meanwhile, Coinbase argued in its legal response to the SEC that even if the commission had the authority to regulate its cryptocurrency exchange business, the lawsuit brought by the watchdog would still violate its ‘due process rights’, which constitutes a ‘violation’. Unusual for the procedures”. The exchange said the “key question principle” should also apply in such a case, meaning the SEC would need new legal backing from the US Congress to regulate digital assets as securities.
In response, the SEC picked holes in the controversy, stating that cryptocurrency exchanges “misunderstand the purpose and reach” of the doctrine. The organizer believes the doctrine is rooted in “separation of powers concerns”.
“This case, by contrast, involves the SEC exercising its longstanding power to enforce legal requirements,” the regulator said. In 1934, Congress authorized the Securities and Exchange Commission (SEC) to enforce federal securities laws through civil law enforcement action.
In addition, the SEC noted that if the court approves Coinbase’s request to apply for an order setting aside its claims, it will file a counterclaim. while, finance poles Reported that the US District Court of New York set July 13, 2023, as Approved date To hear the case between the two parties.
The US Securities and Exchange Commission (SEC) yesterday (Friday) foot Its response to Coinbase’s denial of its claims, stating that the cryptocurrency exchange “has realized that securities laws can apply to its behavior.” The SEC added that Coinbase “knew the rules to consider in assessing the legality of its behaviour” but decided to take a risk “in the name of growing its business”.
In early June, the Securities and Exchange Commission (SEC) took Coinbase to court, alleging that the leading cryptocurrency exchange in the US operated an unauthorized trading platform on which it offered 12 crypto tokens that are unregistered securities. It also alleged that Coinbase operates an illegal crypto storage service.
In response to a lawsuit filed by the SEC last month, Coinbase He said The SEC’s allegations “fall short of all merit,” adding that the regulator has no legal authority to oversee its actions. Coinbase’s listed digital assets are not ‘securities’ but ‘just an asset sale’, the exchange claimed, citing Howey’s test. The test is a legal doctrine used to determine whether a transaction will pass as an investment contract, which is a type of security.
However, in the face of Coinbase, the SEC claimed that the exchange published a “legal framework” for testing “as a basis for making listing decisions that it now claims do not apply to its activities.” The regulator further alleged that Coinbase “explicitly discourages” issuers of digital assets to avoid “problematic statements” that are “traditionally associated with securities” in their marketing materials.
Coinbase previously cited the SEC’s first statement on NASDAQ in April 2021 as evidence that it did not participate in unregistered securities. However, the watchdog in response also responded to this.
“Since going public, Coinbase has repeatedly informed its shareholders of the risks that crypto assets traded on its platform could be considered securities, and therefore its conduct could violate federal securities laws — including in the very filing statement it now refers to as evidence of That the SEC supposedly blessed its behavior.
Does the Saudi Electricity Company operate outside its jurisdiction?
Meanwhile, Coinbase argued in its legal response to the SEC that even if the commission had the authority to regulate its cryptocurrency exchange business, the lawsuit brought by the watchdog would still violate its ‘due process rights’, which constitutes a ‘violation’. Unusual for the procedures”. The exchange said the “key question principle” should also apply in such a case, meaning the SEC would need new legal backing from the US Congress to regulate digital assets as securities.
In response, the SEC picked holes in the controversy, stating that cryptocurrency exchanges “misunderstand the purpose and reach” of the doctrine. The organizer believes the doctrine is rooted in “separation of powers concerns”.
“This case, by contrast, involves the SEC exercising its longstanding power to enforce legal requirements,” the regulator said. In 1934, Congress authorized the Securities and Exchange Commission (SEC) to enforce federal securities laws through civil law enforcement action.
In addition, the SEC noted that if the court approves Coinbase’s request to apply for an order setting aside its claims, it will file a counterclaim. while, finance poles Reported that the US District Court of New York set July 13, 2023, as Approved date To hear the case between the two parties.