Coinbase has made allegations against the SEC
Coinbase has made allegations against the SEC
Cryptocurrency exchange Coinbase has renewed its allegations against the U.S. Securities and Exchange Commission (SEC), whose actions exceed its jurisdiction.
Coinbase is in favor of dismissing the Exchange Act claims and believes that the SEC's definition of an investment contract does not comply with the law, Coincu said.
The SEC is limited to policing securities transactions and investment contracts, and that is the extent of its authority.
In its lawsuit against Coinbase, the SEC said that transactions on the exchange's platform do not qualify as securities transactions.
Coinbase argues that the regulator's formulation of the investment contract is inconsistent with the law, legal standards, and the SEC's previous arguments. The SEC's definition would give the regulator broad, unfettered authority over investment contracts. But because Congress did not grant the SEC such unfettered authority, its position is inconsistent with the separation of powers.
The exchange argues that an investment contract requires contractual obligations beyond the point of sale and a financial stake in the company.
Coinbase also says the SEC's claims about the exchange's brokerage securities and allegations of investing in securities through a wagering system are without merit. According to the exchange, the SEC fails to identify any securities while also failing to provide evidence that the self-storage wallet software incorporates normal brokerage features.
As Coinbase states, its staking program does not involve client investment or exchange oversight, so it provides no basis for allegations of securities law violations.
The SEC's position and actions result in an inappropriate expansion of the SEC's authority. Coinbase believes that the Exchange Act claims should be dismissed because the SEC's investment contract determination is unenforceable.
See also: IBTC's removal from DTCC list caused BTC's downfall.
