SEC stated Coinbase knew years ago that federal securities laws would apply to its listings.
The regulator has provided a sneak peek at Coinbase’s own counterarguments.
U.S. Securities and Exchange Commission (SEC) argues in a new filing revealed on Friday that Coinbase knew years ago that federal securities laws would apply to its listings. In response to a filing by Coinbase, in which the company contended that the regulator lacked the power to sue it, the regulator has now filed its own response.
A month ago, the SEC filed a lawsuit against Coinbase. Saying that it was acting as an unregistered broker, clearinghouse, and exchange by listing at least 13 cryptocurrencies that are not registered securities.
The SEC said on Friday that it will oppose any request for judgement Coinbase could bring. And it urged the court to dismiss Coinbase’s claims that the complaint was brought in violation of the significant questions doctrine and other issues.
A part of the filing reads:
“Coinbase, a multi-billion-dollar entity advised by sophisticated legal counsel, argues it was unaware that its conduct risked violating the federal securities laws, and suggests that by approving Coinbase’s registration statement in 2021 the SEC confirmed the legality of Coinbase’s underlying business activities – at that time and for all time.”
To counter Coinbase’s planned move for judgement. The SEC has provided a sneak peek at its counterarguments, claiming that Coinbase has two “equally flawed arguments.”
Coinbase’s first argument was that investment contracts must have written agreements. And their second was that investment contracts are only asset sales if they are exchanged on secondary marketplaces. The SEC has said that secondary market transactions may nonetheless violate securities laws. Regardless of whether or not a formal contract is in place.