![]() ![]() Reports from the court proceeding are mainly positive for Coinbase. Lawyers for both sides had their first hearing before the judge handling the case. The SEC, on the other hand, countered that even IT services can have an entrepreneurial aspect, thereby classifying staking as an investment activity. Coinbase’s lawyers argued that staking services do not constitute an investment contract, likening it to a paid service with no risk of loss to the staking party. The two parties also sparred over the nature of Coinbase’s staking program. ![]() Coinbase’s legal team pointed out that several of the crypto assets named in the SEC’s lawsuit were already trading on the platform when the SEC gave its nod to Coinbase’s S-1. However, when questioned about the Commission’s stance on Bitcoin and Ether, the representative confirmed that Bitcoin’s status as a non-security was not under dispute, but remained silent on Ether.Ī key point of disagreement emerged around the SEC’s previous approval of Coinbase’s S-1, a form required for an initial public offering (IPO). The SEC’s representative held firm, asserting that the agency’s focus is on regulating conduct, not specific assets. ![]() The judge’s skepticism towards the SEC’s position was palpable, as she noted a discrepancy between the SEC’s assertion of not intending to regulate all cryptocurrencies and its pursuit of alleged securities law violations against Coinbase. The crux of the dispute revolves around the classification of securities and the role of staking within the crypto landscape.Īs you may remember, on 6 June 2023, the SEC charged Coinbase with “operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.” The SEC also charged Coinbase for “failing to register the offer and sale of its crypto asset staking-as-a-service program.”Īccording to a report by Tracy Wang for CoinDesk, on 13 July 2023, during the initial court hearing, Judge Katherine Polka Faila took center stage, probing both parties with pointed questions. Securities and Exchange Commission (SEC) in a legal battle that could set a precedent for future regulation. The crypto industry is on the edge of its seat as Coinbase, one of the oldest and most recognized companies in the sector, faces off against the U.S. ![]()
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