U.S. SEC Disagrees With Coinbase Dismissal Lawsuit
Coinbase and the U.S. SEC clash over crypto rules, with The SEC disagreeing with Coinbase's dismissal lawsuit. The debate heats up as Coinbase prepares to reply in court on Oct 24.
On 3 October 2023, theU.S. Securities and Exchange Commission (SEC) battled with Coinbase over rules on crypto assets. The SEC uses a rule called the Howey test to see if something is an "investment contract." They say that cryptos on Coinbase fit this rule because people invest hoping to gain money mostly from others' work.
The SEC states that cryptocurrencies listed on Coinbase make promises to investors about their value growing. They deny Coinbase’s view that their trades don't involve “investment contracts.” The SEC also reminds that they can control trades that involve cryptos if they are seen as securities, based on old laws.
Coinbase's top lawyer, Paul Grewal, answered the SEC on social media platform X. He said that Coinbase's cryptos aren't securities, so the SEC can’t control them. He mentioned that courts have agreed with Coinbase on this. Grewal talked about the large crypto community in the U.S. and how many companies are fighting for better crypto rules. He ended by saying Coinbase will reply to the SEC in court on 24 October 2023.
