January 17, 2024 7:55 AM | 2 min read
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Coinbase Global Inc (NASDAQ:COIN) is fighting against the U.S. Securities and Exchange Commission’s (SEC) classification of tokens traded on its platform as securities.
In a federal court hearing on Wednesday, Coinbase will argue that the tokens it facilitates trading for should not be under the SEC’s jurisdiction, as they are not securities.
The SEC filed a lawsuit against Coinbase in June, alleging that the exchange was illegally operating as a national securities exchange, broker, and clearing agency. The SEC also targeted Coinbase’s “staking” program, which it claimed should have been registered with the agency.
Coinbase’s argument is based on the premise that crypto assets are fundamentally different from traditional securities and should not be subject to the same regulatory oversight.
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The outcome of this legal battle could have significant implications for the entire digital asset sector. The SEC has been ramping up its scrutiny of the crypto industry, particularly targeting companies offering trading platforms and clearing activity.
The SEC’s recent favorable judgment in its case against Terraform Labs has strengthened its position in ongoing cases with major cryptocurrency exchanges, including Coinbase. The judgment concluded that certain tokens are securities, a ruling that the SEC is now using as a precedent in its ongoing battles.
Despite the legal challenges, Coinbase’s CEO, Brian Armstrong, remains committed to the U.S. market and has even suggested that a change in SEC leadership could potentially resolve the ongoing dispute.
Photo by rafapress on Shutterstock
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