Coinbase, the leading cryptocurrency exchange in the USA, responds head-on to the SEC by filing a motion to dismiss the lawsuits accusing it of securities law violations. The battle is fierce as Coinbase relies on Ripple’s recent XRP recharacterization to bolster its defense. Find out how confident and determined the company is to fight its case.
An epic battle is currently underway between Coinbase, one of the largest cryptocurrency exchanges in the US, and the Securities and Exchange Commission (SEC). Today, Friday August 4, Coinbase filed a motion to dismiss in Manhattan court in response to the regulator’s lawsuit, accusing it of securities law violations.
Coinbase, we can win!
The cryptocurrency firm loudly proclaims that the SEC has exceeded its rights and lacks the authority to bring these charges against it. Coinbase categorically stated, “The SEC violated due process, abused its discretion and abandoned its own prior interpretations of the securities laws. The complaints must be dismissed.”
Coinbase’s staking service, qualified as an investment contract by the SEC, has been one of the main targets of the accusations. The company is vigorously defending itself, arguing that staking does not involve the relinquishment of an asset creating a risk of loss, and therefore cannot be considered an “investment contract” and a “security” under securities laws.
In support of its defense, Coinbase points to a recent judge’s decision regarding the XRP issued by Ripple. This judge concluded that XRP could not be considered a security on the secondary market. Coinbase argues that the facts in their case are “substantially identical”.
However, the road ahead is fraught with difficulties, as another judge recently referred to XRP as a “security” in the Terraform Labs trial, which could influence the final verdict.
Despite the challenges, Paul Grewal, Coinbase’s General Counsel, remains confident: “As far as the SEC litigation is concerned, I want to be very clear – we believe we can win, we expect to win.”
The SEC has until October 3 to file a response to Coinbase’s motion to dismiss. In the meantime, the duel continues to rage between the cryptocurrency exchange and the regulator, with much at stake for the future of the US cryptocurrency industry. The outcome of this legal saga is eagerly awaited by industry players and investors alike.