• Coinbase has disputed the SEC’s assertion of regulatory authority in a lawsuit, citing precedent from the SEC v. Ripple case.
• The crypto firm has requested the court dismiss the case, arguing the SEC’s enforcement action was “punitive” and represented an overreach in its authority granted by Congress.
• U.S. lawmakers recently passed legislation through committees that could restructure the commission’s authority over digital assets.
Coinbase Disputes SEC Regulatory Authority
United States-based cryptocurrency exchange Coinbase has filed a motion to dismiss a lawsuit brought by the Securities and Exchange Commission (SEC) in June. In an Aug. 4 filing with the U.S. District Court for the Southern District of New York, lawyers for Coinbase filed a motion for judgment, claiming that the SEC had “violated due process, abused its discretion, and abandoned its own earlier interpretations of securities laws” in asserting certain regulatory authority over their exchange.
SEC v Ripple Precedent
Lawyers for Coinbase cited precedent from the SEC v Ripple case, in which a judge ruled that XRP largely did not qualify as a security by the commission’s standards. They argued that transactions of 12 tokens at issue in this case did not meet definitions of “investment contracts” under Howey Test and asserted that challenges to Coinbase’s staking program “fail as a matter of law.”
SEC Lawsuit Overreach?
Coinbase has requested dismissal of their case, claiming that it is an abuse of power by Congress to enforce punitively against them without following established legal precedents set forth in previous court cases such as SEC v Ripple .
US Legislators Respond
U.S lawmakers have responded to this lawsuit by passing legislation through committees which aims to restructure how much power and authority is held over digital assets by the commission itself .
Conclusion
Overall , it seems clear that Coinbase is attempting to challenge what it perceives as an abuse of power on behalf of SEC regulators when attempting to impose regulations on crypto exchanges . It remains uncertain whether or not they will be successful , but US legislators are taking steps towards changing how much control can be placed on these firms .