The U.S. Securities and Exchange Commission (SEC) has taken a strategic move in the legal battle against cryptocurrency exchanges, particularly Coinbase.
Key Takeaways
- The SEC, bolstered by a favorable ruling in the Terra lawsuit, seeks to use it as supplemental authority in the ongoing legal battle with Coinbase.
- The Terra case involved the court classifying certain assets as securities, with the SEC now urging similar considerations in the Coinbase lawsuit.
- The SEC argues that the Terra ruling addresses key issues relevant to Coinbase’s alleged violation of securities laws and attempts to dismiss settled legal precedents.
- The SEC aims to secure a summary judgment against Coinbase, mirroring the success it achieved in the Terra case regarding the violation of Section 5 of the Securities Act of 1933.
Coinbase Faces SEC Pressure Post Terra Ruling
In the aftermath of a significant legal victory in the Terra lawsuit, the U.S. SEC is making strategic moves in its legal confrontation with cryptocurrency exchanges. Particularly targeting Coinbase, the SEC has filed a notice of supplemental authority, dated January 4, urging the court to consider the recent Terra ruling in its ongoing lawsuit against Coinbase.
‼️@Coinbase Vs @SECGov : Files #Terra Lawsuit Supplement Authority⚖️
— Crypto News (CoinGape) (@CoinGapeMedia) January 5, 2024
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Leveraging Terra Ruling Against Coinbase
The SEC contends that the Terra lawsuit, which saw the court categorizing certain assets as securities, provides valuable precedent for its opposition to Coinbase’s Motion for Judgment on the Pleadings. The SEC argues that the Terra court’s resolution in its favor addresses crucial issues, including the definition of “investment contract” and the application of the ‘Howey Test,’ which are pertinent to the Coinbase case.
According to the SEC, the Terra ruling rejects attempts by defendants to discard settled legal principles, emphasizing that an investment contract goes beyond a mere contract, transaction, or scheme.
To Conclude
The SEC’s move to invoke the Terra ruling as supplemental authority in the Coinbase lawsuit underscores its strategic approach to assert regulatory control over cryptocurrency exchanges.
By leveraging a favorable judgment in the Terra case, the SEC aims to fortify its rules against Coinbase, signaling a pivotal moment in the legal landscape of crypto regulations in the United States.
