- Coinbase is working on the dismissal of the SEC’s lawsuit accusing the exchange of selling unregistered securities.
- Bloomberg analyst Elliot Stein believes Coinbase is 70% likely to win the motion to dismiss the regulator’s lawsuit.
- Courts remain divided on whether cryptocurrencies are securities.
US Financial regulator, Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, alleging that the exchange sold unregistered securities. The exchange’s lawyers are arguing for the dismissal of the lawsuit, stating that the tokens trading on the platform are not securities.
Also read: Ripple responds to SEC filing, argues the regulator is asking for irrelevant information
SEC v. Coinbase hearing, likely outcome of the lawsuit
Coinbase Global’s lawyers argued that buying cryptocurrency on its exchange platform was like collecting a line of stuff toys, rather than buying stocks or bonds. The objective was to convince the court that the exchange does not sell unregistered securities.
I went into SEC v. Coinbase hearing thinking $COIN would, on this motion, win dismissal of SEC's primary claims (concerning trading) but maybe not staking and broker claims. I left thinking COIN would win full dismissal. Snippet below and full note here: https://t.co/UfjiByMLzS https://t.co/7Y2Z93Nrwt pic.twitter.com/yLUUEwdVkl
— Elliott Z. Stein (@NYCStein) January 19, 2024
Bloomberg analyst Elliot Stein argues that there is a 70% likelihood that Coinbase wins its motion to dismiss the SEC’s primary claims that concern trading of unregistered securities. Stein acknowledges that the regulator’s staking and broker claims may not be dismissed.
Analyst Stein noted that Coinbase is likely to face a $1 billion liability to the SEC, however the exchange has a high probability of prevailing in the lawsuit brought against it by the regulator.
According to a recent Bloomberg report, William Savitt, a lawyer for Coinbase told US District Judge Katherine Polk Failla that traders don’t trade securities on the exchange as buyers do noy get rights as a part of their purchases, as they do with stocks and bonds.
Despite Judge Analisa Torres’ ruling on July 13 in the SEC v. Ripple lawsuit, courts remain divided on whether cryptocurrencies are securities.
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