Coinbase claims that the SEC lawsuit was abused in a way that is extraordinary

Coinbase claims that the SEC lawsuit was abused in a way that is extraordinary

The motion to dismiss asserts that, even if the plaintiff’s allegations are true in the lawsuit, they do not have a legal claim.

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The American cryptocurrency exchange, Coinbase, has filed a motion for dismissal of the SEC complaint in the ongoing legal dispute between Coinbase and United States Securities and Exchange Commission.

Coinbase filed a legal on Thursday, 29 June, with the U.S. District Court for Southern District of New York. The document raised concerns over the SEC’s interpretation of the securities laws and suggested that the agency had exceeded its legal authority.

This action shows Coinbase’s resolve to fight the SEC lawsuit. The motion to dismiss claims that, even if the SEC’s lawsuit is true, the plaintiff has no valid legal claim. The legal team of Coinbase stated the following in its filing:

“Even if it were true that the assets and service identified by the SEC are within its existing regulatory authority this [legal] case must be dismissed for the independent reason that it violates Coinbase’s rights to due process and constitutes a extraordinary abuse of the process.”

The SEC lawsuit claimed that Coinbase had facilitated the unregistered trading of 12 digital tokens, which were considered securities.

The company has denied this claim, arguing that the SEC is applying securities laws in a way that deviates significantly from existing legal frameworks. Paul Grewal tweeted on June 29 that the SEC claims “go beyond existing law”, and therefore should be dismissed.

The SEC defines security as investment contracts. This has been interpreted in the Howey Test by the Supreme Court to include transactions in which individuals invest in a joint enterprise and expect profits from others’ efforts. The SEC named twelve crypto tokens in its lawsuit as securities: Solana (SOL), Cardano ADA, Polygon MATIC, The Sandbox SAND (FLOW), Internet Computer ICP (NEAR), Dash DASH (DASH).

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The lawyers for the exchange argued further that the SEC would declare Coinbase’s registration with the commission valid in 2021. This would allow the company to begin selling its shares to investors once it became public.

This approval was the result of a lengthy review that lasted several months, and included in-depth discussions between Coinbase. Coinbase was able to trade over 240 tokens, including six out of the twelve tokens currently in dispute.

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