- The U.S. Securities and Exchange Commission (SEC) has expressed skepticism over Coinbase’s claim that it was unaware of violating securities laws.
- SEC lawyers argued that Coinbase, a billion-dollar organization advised by sophisticated legal consultants, should have been aware of the risk of violating federal securities laws.
- The SEC previously alleged that Coinbase referenced the Howey test when deciding whether to list an asset on its website, and claimed that nine cryptocurrencies were investment contracts and were offered for sale on Coinbase without registration.
SEC Questions Coinbase’s Claim of Ignorance in Securities Law Violation
SEC’s Skepticism Over Coinbase’s Claim
The U.S. Securities and Exchange Commission (SEC) has cast doubt on Coinbase’s assertion that it was oblivious to any infringement of securities laws. This skepticism was expressed in response to Coinbase’s request for the dismissal of a lawsuit. The SEC’s stance indicates a lack of belief in the cryptocurrency exchange’s claim of ignorance towards any potential legal violations.
SEC’s Argument Against Coinbase
SEC lawyers have made a compelling argument against Coinbase’s claim of unawareness. They pointed out that Coinbase, a multi-billion dollar entity with access to high-level legal advice, should have been cognizant of the potential risk of breaching federal securities laws. They further argued that Coinbase’s assertion that the SEC approved its prospectus in 2021, thereby validating the legality of its core business activities, is questionable. In essence, the SEC lawyers contended that Coinbase accepted the legal framework it now claims is not applicable to its operations as a basis for its listing decisions.
SEC’s Previous Allegations Against Coinbase
The SEC had previously accused Coinbase of using the Howey test as a reference point when deciding whether or not to list an asset on its website. The regulatory body claimed that nine cryptocurrencies, including SOL, ADA, MATIC, FIL, NEAR, VGX, DASH, SAND, ICP, NEXO, AXS, CHZ, and FLOW, were investment contracts and were sold on Coinbase without proper registration. This allegation forms a significant part of the SEC’s case against the cryptocurrency exchange.
A decision on Coinbase’s request for dismissal of the lawsuit will be made in the coming days after the judge examines the arguments presented by both sides.
