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News

Coinbase Responded to the SEC’s Actions To Prevent “Dies in Darkness” in the Lawsuit

July 4, 2024 - Around 2 mins mins to read

Key Points:

  • Coinbase responded to the SEC’s investigation, arguing it lacks due process and is unfair.
  • The exchange seeks court clarification on whether the SEC can regulate digital assets without contractual obligations.
  • The SEC sued Coinbase claiming some cryptocurrencies on its platform are unregistered securities.
In a recent development, Coinbase’s Chief Legal Officer, Paul Grewal, announced on social media that Coinbase responded to the SEC to prevent what it views as an unfair investigation by SEC Chairman Gary Gensler.
Coinbase Responded to the SEC's Actions To Prevent "Dies in Darkness" in the Lawsuit

Read more: How To Make Money On Coinbase

Coinbase Responded to the SEC’s Investigation

Grewal emphasized that the case was initiated by the U.S. Securities and Exchange Commission (SEC), not Coinbase, stating, “Democracy, as well as due process, dies in darkness. We appreciate the Court’s careful consideration of this matter.”

The legal battle continued in March when U.S. District Judge Katherine Failla ruled that the SEC could pursue its lawsuit against Coinbase, accusing the exchange of operating as an unregistered securities exchange, broker, and clearing agency.

In April, Coinbase sought clarification from the U.S. Court of Appeal Second Circuit on whether the SEC has the authority to regulate digital asset transactions that do not involve contractual obligations. The exchange contends that this question is crucial for the cryptocurrency industry’s future. The conflict intensified in May when Coinbase responded to the SEC’s comments on its interlocutory appeal request.

SEC Alleges Unregistered Securities on Coinbase

The SEC’s lawsuit, filed in June 2023, alleges that several cryptocurrencies offered on Coinbase’s platform are unregistered securities.

In response, Coinbase argued that the digital assets listed on its platform are not securities. According to the company, these cryptocurrencies do not constitute “investment contracts” under the SEC’s regulatory framework. Coinbase referenced the Supreme Court’s Howey case, asserting that the cryptos traded on its secondary market are not linked to any contracts involving promoters selling assets.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Coinbase

Coinbase SEC

Lawsuit

Paul Grewal

SEC

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.