The preferred cryptocurrency exchange Coinbase was sued by the U.S. Securities and Change Fee (SEC) on June 6 for operating as an unregistered national securities exchange and dealer. The SEC further asserted that Solana and Cardano’s tokens, as well as the minimum 13 cryptocurrencies offered by Coinbase, must be designated as “crypto asset securities.”
Before filing this case, Coinbase filed a filing challenging the SEC’s overreaching jurisdiction. The SEC has responded to the submission provided by Coinbase in late June, according to a recent tweet from Chief Authorized Officer of Coinbase Paul Grewal.
Coinbase CLO Shrugs Off
Grewal expressed his dissatisfaction with the regulatory body, pointing out several issues with the SEC’s response. He explained that after declaring their intention to drop the matter, Coinbase has granted the SEC an extension to the present grounds for opposition. Unfortunately, Coinbase found the SEC’s answer to be unsatisfactory because it basically restated prior points without making any significant adjustments.
Are Public Activities Being Ignored?
Paul Grewal noted that the Supreme Court’s ruling on the Howey test, which stipulates that an asset must have enforceable rights against the issuer to be referred to as a financing contract, was disregarded by the SEC. Grewal also criticized the SEC for neglecting to consider the public’s interest in their litigation.
If the SEC’s accusations had been true, according to Coinbase, they should not have been permitted to operate for the preceding two years. According to Coinbase, the company failed to properly consider how the litigation would affect the broader public and whether or not its outcome would be consistent with the SEC’s commitment to client safety regulations.
Is the SEC above the law?
Grewal emphasized that the SEC disregarded comments made by its own Chair during congressional testimony, where it was accepted that bitcoin exchanges like Coinbase were exempt from the present regulatory frameworks. Grewal further stressed that the business disregarded the Supreme Court’s strong warnings about regulatory overreach in matters that must be determined by Congress.