SEC Fires Back at Coinbase: They Knew About Security Laws Violation

The U.S. Securities and Exchange Commission (SEC) has responded to Coinbase's claims that it doesn't have the right to sue the crypto exchange. According to a letter from the SEC on July 7, Coinbase knew that it might have to follow federal securities laws and even told its shareholders about this risk.

The SEC said in the letter that since it became a public company, Coinbase has often told its shareholders about the risk that assets traded on its platform might be seen as securities. This could mean that its actions might go against federal securities laws.

The SEC believes that Coinbase, a company worth many billions of dollars and advised by skilled lawyers, is purposely ignoring a 75-year-old law called Howey to create its own rule for what counts as an investment contract.

This letter is a reply to a letter from Coinbase on June 28. In that letter, Coinbase told the court that it was going to file a motion for judgment. This is done when a party believes there is no real argument about important facts in a case.

In their letter, Coinbase talked about a time when SEC chair Gary Gensler told Congress that only Congress could give the power to regulate crypto exchanges. Coinbase also said that the SEC filed charges two years after it went public for actions it had clearly explained to the SEC and the public.

The SEC has accused Coinbase of offering unregistered securities since 2019. The next meeting about this case is set for July 13 at 2:00 pm UTC.