SEC Letter Claims That Coinbase Was Aware Of Securities Law Violations
• July 12, 2023 10:05 pm • CommentsThe SEC recently sent a letter to a district judge where it claimed that Coinbase was already aware of the fact that its operations might violate securities law violations.
The letter goes on to claim that the company had informed its shareholders about the possibility of assets being traded on its platform being considered securities.
However, the flaw in this logic is that Coinbase most likely did this because it knew that regulations within the US were not clear and were highly subjective to the SEC’s interpretation.
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Any crypto company would of likely done the same thing after seeing the lawsuit that the SEC brought upon Ripple where it claimed that XRP was a security.
Therefore, it is more accurate to say that Coinbase knew that there was a risk that the SEC might accuse it of the same thing instead of the company “being aware” of violations.
#CryptoNews: #SEC has responded to #Coinbase's claims that the regulator lacks jurisdiction to prosecute the crypto exchange. 🧐https://t.co/LoPHYZ8coy
— CoinMarketCap (@CoinMarketCap) July 10, 2023
CoinTelegraph reports:
According to a letter sent by the SEC to a district judge on July 7, Coinbase had knowledge of the probability that federal securities laws would apply to its operations, openly informing its shareholders about the possibility of assets traded on its platform being classified as securities.
“Since becoming a public company, Coinbase has repeatedly informed its shareholders of the risk that the crypto assets traded on its platform could be deemed securities and therefore that its conduct could violate the federal securities laws,” reads the regulator’s response.
As per the SEC, Coinbase is a “multi-billion-dollar entity advised by sophisticated legal counsel” that is deliberately “ignoring more than 75 years of controlling law under Howey” in an attempt “to construct its own test for what constitutes an investment contract.“
Coinbase gave many reasons in the past why this new allegation from the SEC did not make sense such as the fact that Coinbase had already gone public for multiple years.
In fact, it was the SEC that had approved the IPO of Coinbase so it is interesting that the SEC would now be accusing the exchange of dealing with securities now.
As of right now, a pre-motion conference is scheduled to take place on July 13 where many expect this to be the start of another long crypto lawsuit involving the SEC.
Binance is also expected to be in the same situation, but the overall crypto markets seem to be unaffected due to the strong market demand for digital assets.
Coinbase was aware of securities law violations, SEC claims in letter https://t.co/T4LGKkebZE
— The Crypto Daily Post (@thecryptodaily_) July 12, 2023
Yahoo concludes:
Additionally, the SEC charged Coinbase of disregarding more than 75 years of precedent-setting Howey case law in an effort “to construct its own test for what constitutes an investment contract.”
This letter is in response to a prior document that Coinbase sent in which the exchange informed the court that it intended to submit a move for judgment.
The SEC Chair Gary Gensler is mentioned by Coinbase as having testified before Congress and purportedly said that “only Congress could confer authority to regulate crypto exchanges” and that “there is not a market regulator around these crypto exchanges.”
On June 6, the regulator charged Coinbase for allegedly offering unregistered securities since 2019. On July 13, a pre-motion conference for the case, which is used to determine what is necessary to move the case to trial and set important dates, is scheduled.
HERE: Coinbase Was Aware of Securities Law Violations, SEC Claims in Letter 📰 👇https://t.co/mOHP2cEs2J
— BlockNews.com (@blocknewsdotcom) July 11, 2023
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