Elliott Stein, senior litigation analyst at Bloomberg, said the chances of cryptocurrency exchange Coinbase losing its ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC) are minimal. . Stein estimates the exchange has a 70% chance of obtaining a complete dismissal of the lawsuit.
recently post On January 19th, Stein said on This is not the case with respect to the allegations regarding the company's management and its overall operating structure. .
But after a five-hour hearing, his confidence changed.
“I went into the SEC v. Coinbase hearing thinking that COIN would prevail on this motion to dismiss the SEC's main claims (relating to trading), but that the staking and broker claims would be dismissed. I resigned believing that COIN would win me a complete dismissal.”
The SEC alleges that Coinbase solicits and sells investment contracts by staking customers' assets, earning rewards on their behalf, and refunding them, thereby falling under SEC regulations. There is.
Additionally, regulators allege that Coinbase was acting as an unregistered broker. Coinbase, on the other hand, strongly disputed this, stating that there is no easy way for crypto exchanges to register their licenses.
However, Stein explains that the turning point was that Coinbase provided a more precise definition of an “investment contract” compared to the SEC.
“I think what Coinbase offers is much more compelling, requiring investment in the business and legally enforceable obligations rather than just an ecosystem,” he said.
Hello from the Federal Courthouse in Lower Manhattan! Today's episode: @coinbase throwing motion @SECGov suit. It's sure to be a great (four hours!) debate with top lawyers, fascinating and disturbing legal issues, and Judge Faila, who has a sense of humor as sharp as a knife and drier than the Sahara Desert. pic.twitter.com/qwR4q4ZAkh
— Elliot Z. Stein (@NYCStein) January 17, 2024
However, he did mention the recent Ripple vs. SEC case in which Ripple won a partial victory in July 2023. A judge has ruled that XRP (XRP) is not considered a security when it comes to retail sales on cryptocurrency exchanges.
Stein suggested that the securities decision in this case will have a domino effect on the Coinbase case as well.
“As the July Ripple decision suggested, the sale of digital assets on public exchanges does not neatly meet the Howey test for what constitutes an investment contract,” he argued.
Related: CryptoBiz: Coinbase vs. SEC lawsuit will decide the fate of crypto tokens
On January 17, Cointelegraph reported that U.S. District Judge Katherine Polk Feira held a five-hour hearing between the SEC and Coinbase on the cryptocurrency exchange’s motion to dismiss.
Notably for the crypto community, Failla asked SEC lawyers to explain why the issuance of digital tokens meets the Howie test, arguing that the case is “overbroad.”
The SEC filed a lawsuit against Coinbase on June 6, 2023, alleging that the cryptocurrency exchange violated federal securities laws.
agency claimed The 13 tokens listed on Coinbase are Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), The Sandbox (SAND), Axie Infinity (AXS), Chiliz (CHZ), Flow, etc. It was a security containing coins. (FLOW), Internet Computer (ICP), NEAR (NEAR), Voyager (VGX), DASH (DASH), NEXO (NEXO).
magazine: Coinbase goes to court with SEC, SBF parent seeks dismissal of lawsuit, and Bitcoin ETF: Hodler's Digest, January 14-20
