Cryptocurrency exchange US-based Coinbase filed a motion to dismiss the lawsuit filed by the Securities and Exchange Commission (SEC) in June.
In an Aug. 4 filing in the U.S. District Court for the Southern District of New York, attorneys for Coinbase filed a motion for a ruling, arguing that the SEC “violated due process, abused its discretion, and retracted its prior interpretations of the securities.” laws”, asserting some regulatory powers in relation to the cryptocurrency exchange. The legal team cited precedent from the SEC v. Ripple case in which a judge ruled that the XRP token largely failed to qualify as a security under the commission’s existing rules.
Specifically, In a summary, Coinbase disputed that the 12 token transactions under consideration in the SEC case met the definition of “investment contracts” under the Howey test, and that the exchange operated as an unregistered broker, claiming that the Commission’s challenge to its staking program “failed.” in law”. The cryptocurrency company asked the court to dismiss the case, arguing that the SEC’s enforcement actions were “punitive” and constituted an excess of the powers granted to it by Congress.
By ignoring this precedent, the SEC violated due process, abused its leeway, and abandoned its previous interpretations of securities laws. By ignoring this precedent, the SEC violated the strict boundaries of its core powers set by Congress. 23
— paulgrewal.eth (@iampaulgrewal) August 4, 2023
By ignoring this precedent, the SEC violated due process, abused its leeway, and abandoned its previous interpretations of securities laws. By ignoring this precedent, the SEC violated the strict limits of its core powers established by Congress. 23
The SEC filed a lawsuit against Coinbase on June 6, about three months after the exchange received the Wells notice from the federal regulator.. The company has consistently denied SEC allegations that its activities may violate securities laws, announcing on August 3 during an earnings call that it will file a motion to dismiss.
In addition to Coinbase, the SEC has sued Binance and Hex founder Richard Hart. US lawmakers recently passed legislation that could change the commission’s power structure over digital assets if it becomes law.
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