The independent agency claims that Coinbase established the possibility of applying national securities regulations to its operations. Additionally, the cryptocurrency company shared information concerning the risk to its shareholders.
The US Securities and Exchange Commission (SEC) responded to claims by Coinbase concerning the lack of jurisdiction by the regulator to prosecute the organization. On July 7, the agency sent a letter to a district judge claiming Coinbase’s awareness concerning the likelihood of federal securities regulations being applied to its operations.
Coinbase Portrays Awareness of Security Law Provisions
Besides, the organization revealed the possibility of assets traded on the platform being categorized as securities to its shareholders.
The regulator’s response read that since it became a public organization, Coinbase has consistently revealed to its shareholders the risk that all crypto assets traded on its platform could be considered securities. As such, its conduct would result in the violation of national securities regulations.
Coinbase Advisory Team Boast Experience Legal Counsel on Investment Contracts
According to SEC, Coinbase is an organization worth billions of dollars and advised by experienced legal counsel that intentionally disregards over 75 years of controlling law under the Howey Test. This move seeks to enable it to create its test regarding an investment contract’s elements.
The letter responds to Coinbase’s initial filing. On June 28, the exchange alerted the court concerning the intent to file a motion for judgment. Cornell University claims that a motion of judgment is necessary when a party believes in the absence of a genuine dispute concerning material facts in a case.
According to the letter, the cryptocurrency platform brought up the appearance of Gary Gensler, SEC’s chair, by purportedly claiming that crypto exchanges lack a market regulator. Besides, it also stated that it is Congress’s sole mandate to discuss authority for crypto exchange regulation.
Coinbase Accuses SEC of Failing to Enhance Compliance
Further, Coinbase revealed that the agency filed charges for activities fully described to the regulator and general public two years after going public. Roland Chase, a corporate and securities attorney, revealed that Congress has only authorized SEC to reassess the going public documents and offer comments.
Additionally, he stated that Congress can ask questions to enhance the organization’s revelation to potential investors. He added that national securities regulations that govern the ‘going public’ are founded on disclosure. This shows that the Securities and Exchange Commission cannot dismiss an organization’s public listing just because the thought of investing in that organization is a terrible idea.
On June 9, Coinbase was charged by the regulator for the alleged provision of unregistered securities since 2019. The case’s pre-motion conference will take place on July 13.
SureTradeGroup.com is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site is paid content that is not written or posted by our writers or editors and the opinions expressed do not reflect the opinions of this website. Any disagreement you may have with brands or companies mentioned in articles will need to be taken care of directly with those specific brands and companies. The responsibility of anyone who may click links in our articles and ultimately sign up for that product or service is their own. Forex, Stocks, Cryptocurrencies, NFTs and Dogital Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.