Coinbase Plans To Seek Full Dismissal Of SEC Lawsuit From Court This Friday

Key Points:

• Coinbase to file for lawsuit dismissal, confident of winning.
• SEC sued Coinbase for unregistered securities trading.
• The exchange beats revenue expectations and aims for regulatory clarity.

Coinbase is set to take action against the U.S. Securities and Exchange Commission (SEC) by filing an order seeking dismissal of the lawsuit on August 4.

The company’s Chief Legal Officer, Paul Grewal, conveyed confidence in their defense during the second-quarter earnings call held on August 3.

Grewal emphasized that Coinbase would argue against the allegations, asserting that they did not list securities on their platform.

Additionally, he highlighted that the SEC lacks regulatory authority over cryptocurrency exchanges and had not indicated any requirement for registration when Coinbase’s registration statement was deemed effective in April 2021.

The company’s Chief Executive, Brian Armstrong, also spoke out against the SEC’s approach, criticizing its regulation by enforcement tactic instead of participating in rulemaking.

Despite the ongoing legal battle, the exchange reported impressive second-quarter earnings on Thursday, exceeding analysts’ expectations with a revenue of $708 million. However, the company did report a loss of $0.42 per share for the same period.

The legal battle between Coinbase and the SEC ensued in June when the regulator accused the exchange of trading at least 13 crypto assets without proper registration as securities.

Along with its rival Binance, Coinbase allegedly operated as an unregistered securities exchange, leading to the SEC’s legal action.

Looking forward, the exchange aims to collaborate with the SEC and lawmakers to establish clearer regulatory guidelines in the cryptocurrency space. The exchange hopes to emerge victorious in the court case and subsequently work towards a more transparent and compliant ecosystem.

As Coinbase prepares to submit its motion for dismissal, the court is expected to review the arguments put forth by the company in October.

This development comes amidst the ever-evolving landscape of cryptocurrency regulations, which remains a critical area of concern for market participants and regulators alike.

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