Benzinga - Coinbase Global Inc (NASDAQ:COIN) is set to contest the U.S. Securities and Exchange Commission’s (SEC) classification of tokens traded on its platform as securities.
What Happened: Coinbase, the world’s largest publicly traded cryptocurrency exchange, is scheduled to present its case in a federal court on Wednesday, as reported by Reuters on Wednesday. The exchange will argue that the tokens it facilitates trading for are not securities and, therefore, should not be under the SEC’s jurisdiction.
The SEC filed a lawsuit against Coinbase in June, alleging that the exchange was illegally operating as a national securities exchange, broker, and clearing agency. The SEC also targeted Coinbase’s “staking” program, which it claimed should have been registered with the agency.
Coinbase’s argument is expected to center around the assertion that crypto assets are fundamentally different from traditional securities and should not be subject to the same regulatory oversight.
See Also: Bitcoin, Ethereum, Dogecoin Rise As Investors Weigh Spot ETF Impact: Analyst Says Scenario For King Crypto Is ‘Rejection’ At $46K And Then Correction To Below $40K
Why It Matters: The outcome of this legal battle could have far-reaching implications for the entire digital asset sector. The SEC has been increasingly targeting the crypto industry, with a particular focus on companies offering trading platforms and clearing activity.
Earlier in January, the SEC used a favorable judgment in its case against Terraform Labs to strengthen its legal battles with major cryptocurrency exchanges, including Coinbase. The judgment concluded that certain tokens are indeed securities, a ruling that the SEC is now using as a precedent in its ongoing cases.
Despite the legal challenges, Coinbase’s CEO, Brian Armstrong, has remained steadfast in his commitment to the U.S. market. He has even suggested that a change in SEC leadership could potentially help resolve the ongoing dispute.
Photo by rafapress on Shutterstock
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