{"id":194826,"date":"2023-10-11T17:39:13","date_gmt":"2023-10-11T17:39:13","guid":{"rendered":"https:\/\/tokenstalk.info\/?p=194826"},"modified":"2023-10-11T17:39:13","modified_gmt":"2023-10-11T17:39:13","slug":"coinbase-suffers-brutal-blow-as-u-s-state-regulators-back-sec-in-unregistered-securities-lawsuit","status":"publish","type":"post","link":"https:\/\/tokenstalk.info\/crypto\/coinbase-suffers-brutal-blow-as-u-s-state-regulators-back-sec-in-unregistered-securities-lawsuit\/","title":{"rendered":"Coinbase Suffers Brutal Blow As U.S. State Regulators Back SEC In Unregistered Securities Lawsuit"},"content":{"rendered":"
Coinbase\u2019s legal brawl with the U.S. Securities and Exchange Commission (SEC) hit a new hurdle Tuesday after an association of North America\u2019s federal securities regulators took a swipe at arguments made by the top American crypto exchange in its defense against the SEC.<\/p>\n
The U.S. SEC has moved to strengthen its arguments in the Coinbase lawsuit.<\/p>\n
The North American Securities Administrators Association (NASAA), a body representing state and provincial securities regulators in the US, Canada, and Mexico, has filed a new amicus brief, arguing that it has a vested interest in the outcome of the suit.<\/p>\n
In the brief, the NASAA argued that digital assets should not be considered special and that the SEC can pursue crypto under the longstanding securities laws.<\/p>\n
The SEC charged Coinbase in June with illegally offering securities on its platform and providing a brokerage and clearing agency service without registering with the American regulator. The SEC further contended that at least nine tokens listed on Coinbase were unlicensed securities. In response, Coinbase argued that the SEC is exceeding its power and that the crypto services it offered its customers did not qualify as securities. <\/p>\n
But, NASAA\u2019s general counsel Vincente Martinez asserted that the SEC\u2019s enforcement action should not be considered \u201cnovel or extraordinary.\u201d<\/p>\n
\u201cThe SEC\u2019s theory, in this case, is consistent with the agency\u2019s longstanding public position\u201d and \u201cwell within the bounds of established law,\u201d the filing said.<\/p>\n
The NASAA\u2019s brief also took aim at Coinbase\u2019s attempt to narrow the definition of a security. It claims that the decades-old legal doctrine known as the Howey test, which is used to determine what qualifies as an investment contract, is sufficient.<\/p>\n
\u201cThe Court should decline to rewrite the Howey test to allow digital asset enterprises to evade regulatory oversight,\u201d said the brief.<\/p>\n
Besides the NASAA, two academic administrative lawyers, namely Todd Phillips and Beau Baumann, also filed amicus curiae briefs in support of Wall Street\u2019s top cop to deny Coinbase\u2019s motion for judgment on the pleadings.<\/p>\n
These pro-SEC filings were bolstered by the New Finance Institute (NFI), which argued that neither \u201cinvesting\u201d nor \u201ccontract\u201d are prerequisites to determining an investment contract. NFI further claims that the SEC has the full authority to regulate cryptocurrencies and urges the court to dismiss Coinbase\u2019s arguments.<\/p>\n
In August, Coinbase filed its motion to have the SEC case thrown out. The government agency filed a 40-page opposition motion on October 3, requesting that the court deny Coinbase\u2019s motion \u201cin its entirety.\u201d<\/p>\n