According to Coinbase, the SEC’s interpretation of an investment contract conflicts with US securities regulations. In its last attempt to get a lawsuit filed by the securities regulator dismissed, Coinbase contested the SEC’s jurisdiction over cryptocurrency. It has claimed that the US Securities and Exchange Commission overreached its jurisdiction by classifying cryptocurrencies that are listed on the exchange as securities.

Coinbase criticized the SEC in a filing on October 24 in a New York District Court, arguing that the regulator’s definition of security was too broad and that the cryptocurrencies the exchange lists are not subject to its jurisdiction.

“The SEC’s authority is limited to securities transactions. Not every parting of capital with a hope of gain qualifies, and trades over Coinbase are only securities transactions if they involve ‘investment contracts.’ The transactions at issue here do not.”

The Assertions When Coinbase Contested The SEC’s Jurisdiction

Coinbase contested the SEC’s jurisdiction over cryptocurrency

Coinbase asserted that the SEC has expanded its authority “radical” and that it has jurisdiction “over basically all investment activity,” which only Congress is entitled to do under the major questions doctrine.

Coinbase Chief Legal Officer Paul Grewal reiterated the assertions in an Oct. 24 X post, stating that the SEC’s criteria have “no limiting function at all.”

Coinbase filed a response to the SEC’s rebuttal on October 3. In response to that, the SEC reiterated its conviction that the cryptocurrencies Coinbase listed were investment contracts under the Howey test and requested that the court reject Coinbase’s motion for dismissal.

On June 6, the SEC filed a lawsuit against Coinbase, claiming that by listing many tokens that it views as securities and failing to register with the agency, the exchange had broken US securities laws. On June 29, Coinbase submitted a move for judgment, claiming that the SEC was abusing its authority and infringing on Coinbase’s right to due process.

The case is overseen by Judge Katherine Polk Failla, who has the authority to order Coinbase and the SEC to appear in court for oral arguments, after which she will either dismiss the matter or move to have it heard in front of a jury.

Coinbase’s CFTC Approval by the CFTC Amid SEC Crackdown

Coinbase contested the SEC’s jurisdiction over cryptocurrency.

Coinbase, a well-known name in the world of cryptocurrencies, has reached a critical milestone. It has gotten approval from the Commodity Futures Trading Commission (CFTC) to launch crypto futures trading in the United States. This approval is a huge step forward for Coinbase and a massive deal for the U.S. crypto trading ecosystem.

The CFTC’s approval is much more than just a formality. It means that Coinbase has fulfilled and even surpassed the stringent standards set by a significant U.S. regulatory body. As a result, Coinbase gained more reputation and dependability in the eyes of its current and future users.

In conclusion, Coinbase’s dispute with the SEC reflects the ongoing tension between cryptocurrency platforms and regulators. Their final bid to toss the regulator’s suit is a significant legal battle that could shape the future of crypto regulation in the United States.

The outcome of this case will have far-reaching implications for the industry, impacting how digital assets are treated and overseen by government agencies. It is worthy to note that a win for Coinbase is a win for the entire crypto community.

Hence, the contention highlights the need for clear and comprehensive regulatory guidelines to foster innovation while ensuring investor protection in the cryptocurrency space.