SEC vs Coinbase Case Slated for July 13
Coinspeaker
SEC vs Coinbase Case Slated for July 13
The long-awaited legal battle between crypto exchange Coinbase (NASDAQ: COIN) and the US Securities and Exchange Commission (SEC) has been scheduled to hold on the 13th of July. Coinbase is just one of the crypto companies under the radar of the US financial watchdog. The Commission alleges that the exchange has been operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. It also accused the company of not registering its staking-as-a-service program. The charges dial back to 2019, claiming that Coinbase has unlawfully generated profits.
SEC and Coinbase Case Set for July 13
The date was moved to July following the exchange’s defense strategy, involving submitting its first response 40 days before the 7th of August deadline. Coinbase deployed a “creative” defense tactic, resulting in the July court date with the US SEC.
Per the rules, the SEC must file a response to Coinbase following the crypto company’s strategic defense. While the expected response date was supposed to be the 3rd of July, the watchdog requested an extensive considering the independence day holiday on the 4th of July. The court granted the request. Furthermore, the pre-trial conference, which was originally slated for the 24th of August is now a pre-motion conference happening on the 1st of July. At a pre-motion conference, the presiding judge and attorneys meet to evaluate the necessary steps to move a case to trial. They also fix dates for specific tasks.
In the Coinbase defense that triggered a new hearing date in July, the exchange noted that many of the tokens SEC highlighted in its allegations are outside the Commission’s purview. The company’s counsel wrote:
“Coinbase has answered the SEC’s Complaint with numerous defenses, including that this action violates due process and constitutes an abuse of discretion. But there is a more fundamental problem with the SEC’s case – one that the Chair recognized two years ago and that entitles Coinbase to judgment on the pleadings now: The subject matter falls outside the SEC’s authority.”
Coinbase’s Defense
The exchange argued further that the regulator could only push further if the transactions in the digital assets and services highlighted in the Complaint are considered “investment contracts. This would mean that they are “securities” per the Securities Act and the Exchange Act. Coinbase added:
“Because as a matter of law none of them are, the claims must be dismissed.”
Lawyer and Twitter legal commentator, MetaLawman, likened the exchange’s tactic of sending its response 40 days earlier to a typical “creative strategy”. He explained that “Coinbase appears to be using this creative strategy to get documents helpful to its cause in front of the Judge through the Answer”.