The U.S. Securities and Exchange Commission (SEC) has asked the U.S. District Court to dismiss a lawsuit filed by cryptocurrency exchange Coinbase. The exchange previously filed a lawsuit against the SEC for failing to identify transactions involving the purchase and sale of securities.
The SEC opposed Coinbase's appeal to the U.S. District Court to dismiss the regulator's lawsuit in its entirety. According to the SEC, Coinbase conducted intermediary transactions involving investment contracts, i.e., securities, BeInCrypto reported.
On June 6, the SEC filed a lawsuit against Coinbase, immediately following a lawsuit against Binance, accusing the exchanges of violating the Securities Act. However, Coinbase CEO Brian Armstrong called for regulatory clarity in the crypto sector. On June 29, Coinbase filed a motion with the court to dismiss the SEC's lawsuit on the grounds that it failed to provide evidence in the form of transactions involving the purchase and sale of securities.
Meanwhile, in a new filing, the SEC again claimed that Coinbase's staking rewards are investment profits, although the exchange's lawyers argue that they are "payments for putting crypto assets to work."
The SEC also accused Coinbase of marketing the staking program as an investment opportunity: "Coinbase 'promoted' the Staking Program as an investment."
According to the SEC, Coinbase's wallet app acts as an unregistered broker. "Coinbase actively solicits investors (on its website, blog, and social media) to use Wallet’s trading features, which compare prices across different third-party trading platforms, and takes and routes customers' orders in crypto asset securities to those platforms."
Brian Armstrong has since strongly criticized the U.S. approach to cryptocurrencies and launched a political campaign called "Stand with Crypto". More than 50 major crypto market participants are supporting the campaign, which aims to ensure that the U.S. economy does not miss out on the potential growth of the crypto sector in the near future.
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