In a significant development, Coinbase, a leading cryptocurrency exchange, has moved to dismiss the lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC). The company has submitted a motion to dismiss the SEC’s complaint, which accuses it of operating as an unregistered corporation and violating securities laws.

Coinbase’s filing argues that the SEC lacks the legal jurisdiction to regulate the exchange. The company has labeled the SEC’s claims of having certain authorities as “untenable as a matter of law.” This 177-page, 11-point defense motion was submitted on June 28.

The company maintains that the SEC’s allegations are unfounded and that its lending program does not qualify as a security. Coinbase’s decision to fight back underscores its commitment to safeguarding its business model and challenging what it views as regulatory overreach.

Coinbase has contested the SEC’s claim, stating that the regulator has been applying securities laws to digital tokens in a way that significantly deviates from existing legal frameworks. Paul Grewal, the Chief Legal Officer of Coinbase, expressed this view in a tweet on June 29, stating that the SEC’s allegations “far exceed the boundaries of current law” and should therefore be dismissed.

Of the 12 cryptocurrencies that the SEC has classified as securities, Coinbase said it had listed six before its 2021 public debut. At that time, the financial watchdog had not classified these assets as securities. Coinbase’s stance is that none of the assets identified by the SEC are in fact securities, and for that and other reasons, secondary transactions in those assets are also not securities.

In their legal motion, Coinbase’s legal team argued that tokens deemed to be securities by the SEC should not be classified as such. They stressed that for a token to be considered an “investment contract,” there must be a contractual commitment to generate profits or a business entity with enforceable obligations towards investors.

The filing also points out that the SEC’s past actions and comments are inconsistent with its most recent litigation against Coinbase. The filing invoked the equitable estoppel defense doctrine, a legal concept that can be used as a defense if previous actions or statements led another party to reasonably rely on those actions.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	1
People	Paul Grewal
Companies	U.S. Securities and Exchange Commission, Coinbase
Currencies	Bitcoin
Securities	None