Coinbase Files Motion to Dismiss SEC Lawsuit
Motion filed because of unfounded allegations
Crypto exchange Coinbase has filed a motion in response to the lawsuit filed against them by the Securities and Exchange Commission (SEC). In the motion, Coinbase requests that the court dismiss the lawsuit, arguing that cryptocurrencies cannot be considered securities.
The SEC had shut down Coinbase and sued them for allegedly facilitating trading in 12 securities without proper permits. However, the classification of cryptocurrencies as securities is a highly debated topic within the crypto industry. Coinbase highlights this disagreement in their motion, stating that the SEC’s application of securities law to digital currencies goes beyond the usual legislative framework.
Claiming that the SEC’s allegations are unfounded and unfairly regulated, Coinbase demands that the case be dropped. They firmly express their disagreement with the accusations and their belief that the SEC’s actions violate Coinbase’s due process rights.
Crypto assets falsely labeled as securities
The root cause of the lawsuit against Coinbase and other platforms like Binance is the accusation of facilitating securities trading without the necessary licenses. The SEC specifically accuses Coinbase of enabling securities trading.
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In the motion, Coinbase contests the designation of cryptocurrencies such as Cardano (ADA), Solana (SOL), Polygon (MATIC), and The Sandbox (SAND) as securities. They argue that these coins should not be considered securities, even in secondary trading.
Coinbase also highlights inconsistencies within the SEC’s previous allegations. They point out that six of the twelve coins designated as securities were not mentioned in previous cases. Coinbase suggests that the SEC’s decision may not be based solely on the size of the coins, raising questions about the SEC’s criteria and approach.
Another key point raised in the motion is Coinbase’s status as a public company. The SEC allowed Coinbase to become a publicly traded company despite offering trading in coins that are now classified as securities. Coinbase’s leadership team is frustrated by the SEC’s shift in stance.
In summary, Coinbase’s motion to dismiss the SEC lawsuit challenges the classification of cryptocurrencies as securities and argues that the allegations are unfounded and infringing on Coinbase’s due process rights. The motion also brings attention to inconsistencies within the SEC’s regulatory approach and the frustration felt by Coinbase’s leadership team regarding the shifting regulatory landscape.