Coinbase, one of the largest crypto exchanges in the world, is currently in the spotlight due to an ongoing legal dispute Securities and Exchange Commission (SEK). The company recently requested that the lawsuit be dismissed outright, although it remains to be seen whether this request will be heard.
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Coinbase is at the forefront of the fight
Coinbase is confident in the case and is seeking, among other things, a complete dismissal of the SEC lawsuit. The exchange is accused of selling securities illegally and the trading platform did not comply with registration requirements. Coinbase still denies these claims and maintains that the type of cryptos it offers should not be considered securities.
The United States Financial Regulatory Commission says Coinbase is subject to its regulations because it pledges customer assets, earns rewards on behalf of customers, and returns them. This is considered participation in the offer and sale of investment contracts.
Elliott Stein, senior dispute analyst at Bloomberg, notes that the likelihood of Coinbase failing in the ongoing SEC litigation is minimal. Stein assumes that the probability that the stock exchange will be completely exonerated in this case is 70%.
Stone lies in one Message on X (formerly Twitter) expressed his belief that Coinbase could successfully appeal certain SEC allegations. Furthermore, he did not expect the crypto company to be able to withstand the allegations regarding the staking rewards program.
During the hearing, this optimism grew: “I went into the hearing thinking that Coinbase could win dismissal of the SEC's key claims in this filing (regarding trading), but perhaps not the staking and brokerage claims.” I left because I thought Coinbase would win outright rejection.”
Unlike the Ripple lawsuit
Stein then continues his argument and speaks of a turning point. He argues that Coinbase has provided a “more precise definition” of an “investment contract” than the SEC itself.
“My position is that the definition offered by Coinbase is more compelling and requires investment in a company, not just an ecosystem, along with an enforceable commitment,” the Bloomberg analyst said.
He is referring to the SEC case against Ripple, in which the judge ruled that XRP does not qualify as a security with respect to sales on crypto exchanges.
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