SEC Says Coinbase May Have Knowingly Violated Securities Laws 14

SEC Says Coinbase May Have Knowingly Violated Securities Laws

  • The United States SEC has filed a response to Coinbase’s motion to dismiss the lawsuit filed against it. 
  • The securities regulator asserted that the crypto exchange may have knowingly violated securities laws. 
  • The SEC said in its latest filing that it would oppose any motion for judgement that the crypto exchange might file. 
  • The regulator also dismissed Coinbase’s suggestion that an IPO approval would protect it from enforcement actions in the future. 

The U.S. Securities and Exchange Commission has asserted that American crypto giant Coinbase may have knowingly violated securities laws. In a filing made with the Manhattan Federal Court, the securities regulator claimed that the crypto exchange was aware that its crypto listings would be under the purview of federal securities laws. 

SEC Will Oppose Any Motion For Judgement From Coinbase

According to the response sent to U.S. District Judge Katherine Polk Failla, the SEC asked the court to disregard arguments previously made by Coinbase regarding the legality of its crypto listings, citing that the exchange was a multi-billion dollar entity with access to sophisticated legal counsel. The securities regulator further took issue with the crypto exchange’s argument that the approval of its IPO confirmed its underlying business and protected it from future enforcement actions. 

The SEC cited Coinbase’s previous court filings which noted that the uncertainty regarding the security status of the tokens listed on the crypto exchange may pose a risk to its investors. 

These actions clearly show that Coinbase understood that the securities laws could apply to its conduct and knew which rules to consider in evaluating the legality of its conduct, but nevertheless made the calculated decision to take on this risk in the name of growing its business.”

Securities and Exchange Commission

The SEC believes that the arguments made by Coinbase are flawed and highlighted that it had adopted the very legal framework as a basis for making listing decisions that it claimed had no applicability to its activities. The response filed with Judge Polk requested the denial of the exchange’s motion to have the lawsuit dismissed. The regulator also stated that it would oppose any motion for judgement from the crypto exchange.