On June 6, the US Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, accusing the popular cryptocurrency exchange of operating as an unregistered national stock exchange and broker. The SEC further claimed that at least 13 cryptocurrencies offered by Coinbase, including Solana and Cardano tokens, should be classified as “crypto-asset securities.”
Prior to this lawsuit, Coinbase filed a filing challenging the SEC’s jurisdictional overreach. Coinbase’s chief legal officer, Paul Grewal, revealed in a recent tweet that the SEC provided a response to the filing made by Coinbase in late June.
Coinbase CLO lashes out
Grewal expressed his criticism of the regulatory body and highlighted several shortcomings in the SEC’s response. He explained that Coinbase had given the SEC an extension to present reasons for opposing the case after expressing its intention to dismiss it. Unfortunately, Coinbase found the SEC’s response disappointing, as it largely repeated previous arguments without significant changes.
After Coinbase gave notice of its intent to dismiss its case, we agreed to an additional few days for the SEC to explain why it intends to object. Now they have presented and unfortunately it is more of the same. 1/6
— paulgrewal.eth (@iampaulgrewal) July 7, 2023
Are public interests being overlooked?
Paul Grewal noted that the SEC ignored the Supreme Court’s position on the Howey test, which states that an asset must have enforceable rights against the issuer to be classified as an investment contract. Additionally, Grewal criticized the SEC for failing to consider the public interest in his lawsuit.
They ignore the simple requirement in the Supreme Court decision in Howey decades ago that an investment contract requires first and foremost enforceable rights against an issuer. It requires more than a simple investment of money, etc. 2/6
— paulgrewal.eth (@iampaulgrewal) July 7, 2023
According to Coinbase, if the SEC’s allegations were valid, they should not have been allowed to operate for the past two years. Coinbase argues that the agency failed to adequately assess the impact of the lawsuit on the public and whether its outcome aligns with the SEC’s commitment to consumer protection standards.
Is the SEC above the law?
Grewal noted that the SEC ignored statements made by its own chairman during testimony before Congress, where it was acknowledged that existing regulatory frameworks did not apply to cryptocurrency exchanges like Coinbase. In addition, Grewal stressed that the agency ignored clear warnings from the Supreme Court about regulatory overreach on matters that should be determined by Congress.
And it goes on and on, ignoring these device points. But we do seem to agree on one thing: many of these issues can and should be decided promptly as questions of law. Read it for yourself. 6/6 pic.twitter.com/rKJIsYStSw
— paulgrewal.eth (@iampaulgrewal) July 7, 2023
This post Coinbase CLO Criticizes SEC Over Its Response To June Filing, Cites Deficiencies
was published first on https://coinpedia.org/news/coinbase-clo-slams-sec-for-its-response-to-june-filing-cites-shortcomings/
