Coinbase
This legal appeal comes as part of its ongoing dispute with the Securities and Exchange Commission (SEC), which accused Coinbase in 2023 of operating without proper registration as a broker, exchange, or clearinghouse.
The SEC’s lawsuit against Coinbase alleges that the exchange failed to meet the disclosure requirements mandated for securities markets.
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However, Coinbase's legal team has countered this claim by asserting that trades on its platform involve the exchange of digital assets—not securities. They argue that buyers and sellers interact anonymously, and the transactions do not include ongoing obligations between parties.
In a filing on January 21 with the Second Circuit Court of Appeals, Coinbase argued that determining whether secondary crypto transactions fall under securities law is critical for the industry. It emphasized that clear guidance is needed to avoid inconsistent rulings across different courts.
According to Coinbase, without such clarity, market participants, lawmakers, and regulators will struggle to determine who has authority over digital asset trading.
Coinbase’s filing explains that digital asset buyers do not receive the rights typically associated with securities, such as those linked to stocks or bonds. The company insists that its platform facilitates straightforward sales of digital assets without the promises or responsibilities found in traditional securities transactions.
Meanwhile, the United States District Court for the Western District of Texas recently reversed sanctions imposed on Tornado Cash. What did the filing say? Read the full story.
