In recent weeks, significant events related to legal issues and regulatory actions have taken place in the cryptocurrency industry. In particular, the leading American centralized cryptocurrency exchange Coinbase (NASDAQ) is actively challenging and demanding a review of the lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC). This lawsuit was filed last year and concerns allegations of offering unregistered securities in the form of tokens. Coinbase insists on a review of this case, citing recent court decisions on similar cases, including the SEC’s case against another major crypto exchange — Binance.
SEC Allegations and Legal Battle with Coinbase
On June 6, 2023, the SEC charged Coinbase with offering unregistered securities, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO tokens. Additionally, the regulator accused the exchange of operating without the appropriate registration as an exchange, broker, or clearing agency. Interestingly, similar allegations were made against another major cryptocurrency exchange, Binance, on June 5 of the same year.
However, at the end of June 2024, an important event occurred in the legal process that could have a significant impact on future legal proceedings. Judge Amy Berman Jackson of the District Court for the District of Columbia partially dismissed the SEC’s case against Binance, granting the exchange’s motion to dismiss charges related to secondary sales of BNB exchange token and the Simple Earn program. Judge Jackson cited the precedent set by Judge Analisa Torres in the SEC v. Ripple case, where it was ruled that secondary sales of XRP tokens do not violate securities laws. This decision is significant as it essentially refutes the SEC’s claim that transactions on the secondary market with the BNB token on Binance qualify as investment contracts.
Coinbase lawyer Paul Grewal commented on this decision, noting that it completely contradicted the SEC’s previous claims that BNB token transactions constitute investment contracts. This sets a precedent that could impact other legal proceedings and allegations against cryptocurrency platforms.
Conflict with SEC and FDIC
Furthermore, at the end of June of this year, Coinbase filed a lawsuit against the SEC and the Federal Deposit Insurance Corporation (FDIC) for refusing to provide internal documents related to investigations of cryptocurrency companies. Coinbase claims that the regulator’s refusal to provide these documents violates the Freedom of Information Act, which guarantees access to public information. This legal standoff underscores the growing tension between cryptocurrency platforms and government agencies and highlights the importance of transparency and accessibility of information in regulatory practice.
Thus, the recent events underscore the active confrontation between cryptocurrency exchanges and regulators, as well as the importance of court decisions and legal precedents in shaping the future regulation of the cryptocurrency market.
