Benzinga - In a federal court case against Coinbase (NASDAQ:COIN), the Securities and Exchange Commission (SEC) has contended that cryptocurrencies lack any “innate or inherent value.” This argument has drawn criticism from Tesla CEO Elon Musk and Dogecoin (CRYPTO: DOGE) creator.
What Happened: Billy Markus, popularly known as Shibetoshi Nakamoto, co-creator of Dogecoin, took a jab at the SEC on social media platform X, stating, “then return all the taxes y’all made me pay for receiving it you horrific evil hypocrites.”
its realness is transitory— Shibetoshi Nakamoto (@BillyM2k) October 9, 2023
Musk quickly responded, questioning the SEC’s assertion, saying, “It’s real if you have to pay taxes, but otherwise not real?”
The SEC, in response to a motion filed by Coinbase to dismiss the agency’s lawsuit, petitioned the judge to reject Coinbase’s argument that cryptocurrency trading does not constitute an investment contract. The SEC justified its stance by pointing to federal securities laws, which it claimed should be interpreted flexibly using the legal doctrine called the “Howey Test.”
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Why It Matters: The SEC wrote in its filing, “If crypto assets embody some underlying value… that value is accessed through the digital token. But the token… has no innate or inherent value of its own—it is tied to its underlying value, which for the crypto assets at issue in this case, is the investment contract.”
However, Coinbase’s chief legal officer, Paul Grewal, dismissed the SEC’s arguments as “more of the same old same old.” Grewal wrote, “The SEC’s arguments today would mean that everything from Pokemon cards to stamps to Swiftie bracelets are also securities. As [New York congressman Rep. Ritchie Torres] made so clear last week, that is simply not the law, nor should it be.”
The @SECgov just filed its opposition to our motion to dismiss their case against @Coinbase. It's more of the same old same old. But don't just take my word for it – take a look for yourself. 1/7 https://t.co/QMdkRoiq0V— paulgrewal.eth (@iampaulgrewal) October 3, 2023
In March, Coinbase received a Wells Notice from the SEC over potential violations of U.S. securities law.
Earlier in June, the SEC initiated legal proceedings against Coinbase, accusing the exchange of offering about a dozen cryptocurrencies including Solana (CRYPTO: SOL), MATIC (CRYPTO: MATIC) , and Cardano (CRYPTO: ADA), that were not registered securities.
Photo from Shutterstock.
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