By Jonathan Stempel
Coinbase (NASDAQ: ), the biggest U.S. cryptocurrency platform, mentioned it can ask a choose to throw out a lawsuit by the U.S. Securities and Alternate Fee that claims it broke the legislation by failing to register its enterprise.
In a letter filed shortly earlier than midnight Wednesday in federal courtroom in Manhattan, Coinbase mentioned the SEC doesn’t have standing to file civil lawsuits as a result of the property it trades on its platform aren’t “funding contracts,” and due to this fact not securities.
“The SEC can solely make its claims if the tokens and funding companies it identifies are ‘securities,'” Coinbase mentioned. “They don’t seem to be.”
SEC spokespeople didn’t instantly reply to requests for remark Thursday.
June 6 The SEC sued Coinbase, saying it made billions of {dollars} by appearing as a intermediary, together with buying and selling a minimum of 13 crypto-assets, or tokens, similar to , and Polygon that ought to have been registered as securities.
Coinbase has additionally been sued for its “staking” program, the place it accumulates cryptocurrency property to assist operations on the blockchain community in alternate for “rewarding” purchasers by taking commissions.
The lawsuit comes a day after the SEC sued the world’s largest cryptocurrency alternate, Binance, accusing it of inflating buying and selling volumes, mishandling buyer funds and mendacity about its operations.
SEC Chairman Gary Gensler has tried to say jurisdiction over the cryptocurrency business, which he says has undermined investor confidence in US capital markets.
In a separate 177-page submitting denying the SEC’s substantive claims, Coinbase mentioned it “welcomes regulation” however that the regulator was arbitrarily and with out congressional authorization making an attempt to fill a “regulatory hole” for crypto property.
“The company’s enforcement authority is vital however not limitless,” it mentioned. “The SEC’s actions right here cross these strains and are unlawful.”
Shares of Coinbase’s mum or dad firm Coinbase World The Nasdaq was up $1.58, or 2.2%, at $72.33 in afternoon buying and selling.
The case is SEC v. Coinbase Inc et al., U.S. District Court docket, Southern District of New York, No. 23-04738.
