Coinbase seeks dismissal of SEC suit, claims extraordinary abuse of process

Coinbase Requests Dismissal of SEC Lawsuit

Coinbase has submitted a request to have the lawsuit brought against them by the United States Securities and Exchange Commission (SEC) dismissed in the ongoing legal conflict between the two parties.

In a legal filing submitted to the U.S. District Court for the Southern District of New York on Thursday, June 29th, Coinbase expressed qualms regarding the SEC’s understanding of securities regulations, implying that the agency was exceeding its legal jurisdiction.

This action serves to demonstrate Coinbase’s resolve to contest the SEC’s lawsuit. The motion to dismiss contends that even if all of the claims in the lawsuit are accurate, the plaintiff does not possess a valid legal claim. Coinbase’s legal personnel declared in the filing:

The SEC’s lawsuit claimed that Coinbase enabled trading of 12 digital tokens without proper registration, which were considered securities.

The company has refuted this assertion, maintaining that the SEC is interpreting securities regulations concerning certain digital tokens in ways that differ greatly from current legal structures. Paul Grewal, Coinbase’s head of legal affairs, tweeted on June 29th that the SEC’s allegations “go beyond existing law” and should, therefore, be rejected.

SEC Classifies Certain Crypto Tokens as Securities

The Securities and Exchange Commission (SEC) has classified certain crypto tokens, such as Solana SOL, Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Flow (FLOW), Internet Computer (ICP), Near (NEAR) and Dash (DASH), as securities, based on their definition which encompasses investment contracts. This interpretation was confirmed by the Supreme Court in the Howey Test, which states that these transactions involve individuals investing money in a common enterprise and expecting profits primarily from the efforts of others.

Gary Gensler is disadvantaging small investors for the benefit of Wall Street.

Coinbase Approved to Offer Shares to Investors

The attorneys representing the exchange contended that in 2021, the SEC made Coinbase’s statement of registration with them valid, thus allowing the firm to offer its shares to investors when it went public.

Following an extensive review process that took multiple months and included thorough conversations with Coinbase, approval was given. This enabled Coinbase to trade over 240 tokens on its spot exchange, including six of the twelve tokens currently in dispute.

The SEC has a strong dislike for Metaverse.

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