Coinbase seeks dismissal of SEC suit, claims extraordinary abuse of process

In the ongoing legal battle between Coinbase and the U.S. Securities and Exchange Commission (SEC), the U.S. cryptocurrency exchange has filed a motion to dismiss the SEC’s lawsuit.

legally document Coinbase raised concerns about the SEC’s interpretation of securities laws in a lawsuit filed in the U.S. District Court for the Southern District of New York on Thursday, June 29, suggesting the SEC is reaching beyond its legal powers. .

The move underscores Coinbase’s determination to contest the SEC lawsuit. The motion to dismiss alleges that plaintiffs have no valid legal claim, even if all of the allegations in the suit are true. Coinbase’s legal team said in the filing:

“Even if the SEC is correct that the assets and services identified are within the scope of existing regulators, this [legal] This lawsuit must be dismissed on independent grounds that it violates Coinbase’s due process rights and constitutes an extraordinary abuse of process. ”

The SEC lawsuit alleges that Coinbase facilitated the unregistered trading of 12 digital tokens that are considered securities.

The firm disputes this allegation, arguing that the SEC applies securities laws to certain digital tokens in ways that deviate significantly from existing legal frameworks. Coinbase Chief Legal Officer Paul Grewal said in a tweet on June 29 that the SEC’s allegations “go far beyond existing law” and should be dismissed.

today @coinbase We have submitted our response and notice of intent to file a motion to dismiss the appeal. @SECGov lawsuit against us. Read our answer yourself. Our discussion speaks for itself. 1/2 https://t.co/Ld2ZEejhyM

— paulgrewal.eth (@iampaulgrewal) June 29, 2023

The SEC’s definition of a security includes an investment contract, which the Supreme Court interpreted in the Howie Test to include transactions in which individuals invest funds in a common enterprise and expect profits primarily from the efforts of others. I’m here. In the lawsuit, the SEC has identified 12 crypto tokens including Solana SOL, Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Flow (FLOW), Internet Computer (ICP), Near (NEAR) and Dash. Listed as securities. (dash).

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The exchange’s attorneys further allege that in 2021, the SEC declared Coinbase’s registration filings with the commission valid, thereby allowing the company to sell shares to investors when it went public. bottom.

This approval came after an extensive review process over several months, with in-depth discussions with Coinbase. This will allow Coinbase to trade over 240 tokens on its spot exchange, including 6 of the 12 currently in dispute.

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