SEC Won’t Object to Coinbase’s Motion to Speed up Case – The United States Securities and Exchange Commission (SEC) sent a letter to the judge overseeing the Coinbase case on July 7, in response to Coinbase’s request to file a motion for judgment on the pleadings.
In the letter, the SEC informed the judge that they do not oppose Coinbase’s motion. In order to facilitate a prompt resolution of the case, the SEC expressed its desire to avoid any unnecessary delays in considering the issues raised by Coinbase.
However, analysts have provided a preview suggesting that the arguments presented by the SEC in the letter are not particularly strong. For example, the SEC refers to the LBRY case as evidence supporting its stance. However, it should be noted that the judge in that lawsuit did not definitively determine that tokens traded on the secondary market are considered securities.
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Furthermore, the SEC makes a reference to a case from Connecticut that is not directly relevant to the current situation, as it involved a token issuer rather than a cryptocurrency exchange. The SEC’s response in the letter does not address the testimonial evidence presented by Coinbase from Gary Gensler.
Gensler’s testimony in May 2021 stated that the SEC lacked legal authority over cryptocurrency exchanges and that there was no existing regulatory framework for such exchanges within the SEC. The SEC plans to file a motion to strike Coinbase’s defense using the Major Questions Doctrine.
However, the chances of this motion succeeding are predicted to be very slim. It is anticipated that Coinbase will ultimately succeed in its argument based on the Major Questions Doctrine, either at the district court level or through an appeal. During the upcoming pre-motion conference on July 13, it is expected that a schedule for briefing on Coinbase’s motion for judgment on the pleadings will be established.
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In the beginning of June, the SEC initiated lawsuits against Coinbase and Binance, which are among the largest cryptocurrency exchanges globally. The regulator claims that these exchanges facilitated the trading of unregistered cryptocurrency securities. In reply to the lawsuits, Coinbase stated that it intends to vigorously defend itself in court.