SEC Claims Coinbase Knew It Violated US Securities Laws

The United States Securities and Exchange Commission has issued a response to Coinbase’s recent filing, in which it claims the exchange made a “calculated decision” to act as an unregistered securities intermediary.

The company filed an application to dismiss the SEC’s allegations in June.

• The agency launched a full-fledged legal crackdown against the two giants of the crypto industry in early June, when it filed consecutive lawsuits against Binance (and its US affiliate) as well as Coinbase.
• The latter responded swiftly by filing a motion to dismiss all charges just weeks after the trial.
• In it, the exchange argued that the SEC had already given a green light to its business model in 2021 when it allowed Coinbase to become a publicly traded company.
• The company has made several repeated attempts to initiate positive regulatory talks with the US watchdog, but to no avail so far. It also asked the SEC to provide more clarity on its regulatory policies towards cryptocurrencies, but the agency is yet to respond.
• However, the SEC responded to Coinbase’s request to dismiss the allegations on Friday, July 7. Admission reads that “Coinbase’s own actions belie its contention” that it “was unaware that its conduct risked violating federal securities laws.”
• The commission further claims that since listing on the NASDAQ the exchange has “repeatedly” warned its shareholders about the risk that “crypto assets traded on its platform may be deemed securities and Its conduct may therefore violate federal securities laws – including” It now points to registration details as evidence that the SEC allegedly blessed its conduct.
• The filing also notes that Coinbase has chosen to ignore “more than 75 years of regulatory legislation under Howe” and makes two “flawed arguments” in its request for dismissal:

“(1) an investment contract must be or involve a formal, common law contract, or (2) even if a crypto asset is considered an investment contract when it is first offered and sold by the issuer, the same The asset cannot be an investment contract when traded between non-issuers on platforms such as Coinbase because secondary market transactions that do not involve its issuer are simply “asset sales”. Both the arguments are wrong,” said the SEC.

The United States Securities and Exchange Commission has issued a response to Coinbase’s recent filing, in which it claims the exchange made a “calculated decision” to act as an unregistered securities intermediary.

The company filed an application to dismiss the SEC’s allegations in June.

• The agency launched a full-fledged legal crackdown against the two giants of the crypto industry in early June, when it filed consecutive lawsuits against Binance (and its US affiliate) as well as Coinbase.
• The latter responded swiftly by filing a motion to dismiss all charges just weeks after the trial.
• In it, the exchange argued that the SEC had already given a green light to its business model in 2021 when it allowed Coinbase to become a publicly traded company.
• The company has made several repeated attempts to initiate positive regulatory talks with the US watchdog, but to no avail so far. It also asked the SEC to provide more clarity on its regulatory policies towards cryptocurrencies, but the agency is yet to respond.
• However, the SEC responded to Coinbase’s request to dismiss the allegations on Friday, July 7. Admission reads that “Coinbase’s own actions belie its contention” that it “was unaware that its conduct risked violating federal securities laws.”
• The commission further claims that since listing on the NASDAQ the exchange has “repeatedly” warned its shareholders about the risk that “crypto assets traded on its platform may be deemed securities and Its conduct may therefore violate federal securities laws – including” It now points to registration details as evidence that the SEC allegedly blessed its conduct.
• The filing also notes that Coinbase has chosen to ignore “more than 75 years of regulatory legislation under Howe” and makes two “flawed arguments” in its request for dismissal:

“(1) an investment contract must be or involve a formal, common law contract, or (2) even if a crypto asset is considered an investment contract when it is first offered and sold by the issuer, the same The asset cannot be an investment contract when traded between non-issuers on platforms such as Coinbase because secondary market transactions that do not involve its issuer are simply “asset sales”. Both the arguments are wrong,” said the SEC.