The US Securities and Exchange Commission (SEC) has achieved victory in its lawsuit against crypto exchange Coinbase.
The SEC first charged Coinbase in June 2023 for allegedly violating securities laws, including selling unregistered securities and operating an unregistered exchange/brokerage firm.
Now, Judge Katherine Polk Failla has ruled that the SEC made “adequate” allegations that Coinbase engaged in “the unregistered offering and sale of securities,” meaning that Coinbase’s motion to dismiss has been partially denied.
However, the court also agrees with Coinbase that the exchange is entitled to dismiss the claim that Coinbase acts as an “unregistered broker by making its Wallet application available to customers.”
Coinbase Chief Legal Officer Paul Grewal addressed the statement on social media platform X, saying the exchange was prepared for the decision and remained confident in its position.
“First motions like ours against a government agency are almost always denied. But clarity is the ultimate goal and today’s decision continues us on that path.
As we continue this process and any necessary calls, we encourage Congress to build on the momentum we saw last year to advance comprehensive digital asset legislation in the US. This is critical if we want innovation to stay in the US.
We also appreciate the Court’s insight that technological innovations such as Coinbase Wallet do not and cannot have any impact on U.S. securities laws.
Looking ahead, we remain confident in our legal arguments, we look forward to proving ourselves right, we look forward to the opportunity to hear the SEC for the first time, and we appreciate the continued consideration of our case by the Court.”
Both Coinbase and the SEC have been ordered to submit a case management plan to the court by April 19 so that the case can proceed.
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