coinbase sec Archives - Coin Engineer

Court Reviews SEC’s Rejection of Coinbase’s Rulemaking Request

Tanju Akbıyık — Tue, 24 Sep 2024 16:30:14 +0000

In 2022, Coinbase requested that the U.S. Securities and Exchange Commission (SEC) establish clear regulations for cryptocurrency, including guidelines on which digital assets qualify as securities. The SEC denied this request in late 2023, leading Coinbase to appeal to the U.S. Court of Appeals for the Third Circuit to compel the regulator to provide a more substantive response.

On September 23, 2023, the court’s panel of judges questioned the SEC’s minimal explanation for rejecting Coinbase’s petition, with Judge Thomas Ambro suggesting the denial was nearly “vacuous.” Ambro noted that while the SEC doesn’t need to offer an exhaustive rationale, it must provide some meaningful reasoning for its decision.

Coinbase’s legal team argued that the SEC’s two-page denial was insufficient, especially in light of the regulator’s continuous enforcement actions against crypto companies. Eugene Scalia, Coinbase’s counsel, stated that the SEC’s rejection lacked any justification for why current rules are inadequate for the digital asset industry.

Coinbase’s chief legal officer, Paul Grewal, echoed these frustrations, calling out the SEC for an arbitrary enforcement campaign while failing to provide clear guidance for the crypto industry. Grewal criticized the SEC’s refusal to offer a reasonable explanation for its brief denial.

Might interest you: Flappy Bird Might Launch Play To Earn Token!

The judges also expressed concern about how the crypto industry can comply with outdated rules that don’t fit the decentralized nature of digital assets. Judge Stephanos Bibas remarked that while the SEC has been actively enforcing actions against crypto firms, it has neglected to offer clear regulatory guidance. He suggested that the SEC’s repeated actions indicate interest in crypto but without providing the necessary higher-level regulations.

In its defense, the SEC cited ongoing efforts and other priorities as the reasons for denying Coinbase’s request for rulemaking at this time. However, the agency has faced significant pushback for its approach, particularly after charging Coinbase in June 2023 with operating as an unregistered securities exchange, broker, and clearing agency.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

The post Court Reviews SEC’s Rejection of Coinbase’s Rulemaking Request appeared first on Coin Engineer.

Coinbase and SEC Case Come Close to End

Tanju Akbıyık — Sat, 13 Jul 2024 11:00:46 +0000

Coinbase continues its efforts to subpoena Gary Gensler despite recent backtracking in the ongoing Coinbase and SEC case, seeking transparency in the regulatory process.

Coinbase and SEC Case

The leading crypto exchange has taken a significant step forward in its quest to subpoena SEC Chairman Gary Gensler. Despite recent difficulties, the crypto exchange is requesting access to Gensler’s personal devices and emails, hoping to uncover critical communications about the crypto market.

For context, at a recent hearing in which the SEC attempted to dismiss the subpoena against Gary Gensler, Judge Katherine Polk Failla expressed dissatisfaction with the exchange’s efforts. Commenting on the development, Judge Failla said he was “surprised” and “not in a good way”.

Amid the ongoing Coinbase and SEC lawsuit, Elizabeth Goody has joined the SEC’s legal team against the exchange. In the latest filing with the court, Elizabeth Goody applied to appear in court as counsel to the US SEC, further intensifying the market debate.

Meanwhile, it comes at a time when the SEC has recently closed its investigations into several crypto firms, including Consensys, Paxos, and Hiro, without recommending sanctions. This move has brought into question the SEC’s stance on current crypto regulations in the crypto market.

However, Coinbase Director of Legal Affairs Paul Grewal commented on these latest developments, expressing hope that the SEC’s backtracking could be a sign that they are willing to work in good faith with the crypto industry. Grewal said in his last X post:

“I hope this apparent retraction is a sign that the SEC will begin to operate in good faith, rather than simply churning out Wells notices and participating in the industry as it claims.”

Meanwhile, the ongoing Coinbase lawsuit highlights a broader fight for regulatory clarity in the crypto industry. The exchange’s persistent efforts to subpoena Gensler reflect the company’s commitment to ensuring transparency and fairness in the regulatory process.

The post Coinbase and SEC Case Come Close to End appeared first on Coin Engineer.

Coinbase Accuses US SEC and FDIC of Unfairly Blocking Document Requests

Tanju Akbıyık — Thu, 27 Jun 2024 22:30:16 +0000

Coinbase is heading back to court against U.S. regulators and wrangling over Freedom of Information Act (FOIA) requests. A US crypto exchange is trying to obtain documents showing how the initial decisions were made at the Securities and Exchange Commission (SEC) on which digital tokens would be considered securities.

The company’s subcontractor, History Associates, is also suing the Federal Deposit Insurance Corporation (FDIC) over letters sent to financial firms urging them to halt crypto activities.

History Associates Inc., on behalf of Coinbase, stated that documents that should have been accessible under FOIA were wrongfully denied by the SEC and FDIC. Requesting written communications from the SEC regarding three closed cases in which the agency considers digital assets as securities, Coinbase is asking the FDIC for “cease and desist letters” from the agency’s inspector advising financial firms to cease their crypto activities.

Coinbase‘s legal challenge comes on the heels of the SEC saying it has closed its review of “Ethereum 2.0” as a potential security, so it may be harder for the regulatory agency to deny document requests.

The exchange is also seeking documents related to two previously resolved digital asset cases. One involves Zachary Coburn, who founded the EtherDelta platform, which the SEC ruled were “digital asset securities” in 2018, and the other involves Enigma MPC, which sold $45 million worth of ENG tokens in 2017, which the SEC ruled were unregistered securities.

“We requested documents related to closed investigations to shed light on how the SEC views its new, sweeping (and illegal) authority,” Coinbase Chief Legal Officer Paul Grewal said in a statement on X (formerly Twitter). “One of these investigations focused on ETH, which only recently closed and the SEC publicly declared not a security in 2018. Other investigations have been closed for years. But the SEC blocked our requests.” The SEC denied requests for information about long-closed cases and the more recent ETH matter under FOIA “exception 7A” – protection from uncovering matters that could undermine law enforcement efforts. Spokespeople for the SEC and FDIC declined to comment on the cases.

History Associates’ lawsuit against the FDIC argues that letters to firms asking them to cease digital asset business are “part of an effort by the FDIC and other financial regulators to pressure financial institutions to cut off digital asset firms from the banking system.”

These lawsuits join other legal clashes between Coinbase and U.S. financial regulators. The current case with the SEC over allegations that the agency operates an illegal exchange that trades unregistered securities is one of the most high-profile court battles that could determine the crypto industry’s future in the United States. Coinbase also sued the SEC, seeking a court order that would force the regulator to issue guidance defining digital asset securities.

Coinbase has previously funded lawsuits against the US government. In 2022, it backed a group of investors and developers — including some of its employees — who sued the U.S. Treasury Department over sanctions against the Tornado Cash crypto mixer. That lawsuit failed in federal court, but the plaintiffs appealed.

The post Coinbase Accuses US SEC and FDIC of Unfairly Blocking Document Requests appeared first on Coin Engineer.

Deaton Backs Coinbase Against SEC in Senate Bid

Tanju Akbıyık — Sun, 28 Apr 2024 09:46:50 +0000

Republican attorney and advocate for cryptocurrency, John Deaton, who is vying to become Sen. Elizabeth Warren’s contender in the Massachusetts Senate race, has submitted a supportive brief in Coinbase’s legal dispute against the Securities and Exchange Commission (SEC). Coinbase is seeking a higher court’s decision on whether tokens traded on secondary markets without obligations on the issuers should be classified as securities.

Deaton supports Coinbase’s initiative, arguing that the SEC is taking an unconstitutional approach in accusing certain token trades of violating securities laws. Emphasizing his stance as a vocal supporter of cryptocurrency, Deaton filed a friend-of-the-court brief in Coinbase’s attempt to have a higher U.S. court determine the criteria for classifying a digital token as a security.

As one of the Republican candidates competing for the opportunity to challenge Sen. Elizabeth Warren, Deaton aims to strengthen Coinbase’s case in its legal battle with the SEC. Coinbase has sought an interlocutory appeal to obtain a separate ruling on the specific legal question regarding digital asset transactions that do not entail obligations to the original issuer, potentially falling under SEC-regulated investment contracts.

Deaton argues that the SEC, driven by political motives and compromised integrity, relies excessively on interpretations of the Howey test to categorize tokens unequivocally as securities, exceeding its jurisdiction. He criticizes the SEC’s broad application of the Howey test, asserting that it should involve a transaction-by-transaction analysis, considering the vast array of digital assets and transactions occurring on various blockchains.

Having previously intervened in Ripple Labs’ confrontation with the SEC, Deaton has established himself as a prominent figure in the digital asset community. While aspiring to secure the Republican nomination in the September primaries before challenging Warren in the November general election, Deaton faces stiff competition. Despite the challenges, polls indicate Warren’s strong likelihood of retaining her Senate seat.

Deaton is slated to speak at Consensus 2024 in Austin, Texas, next month, further highlighting his engagement in cryptocurrency advocacy and legal matters.

The post Deaton Backs Coinbase Against SEC in Senate Bid appeared first on Coin Engineer.

Coinbase Goes Court Against SEC

Tanju Akbıyık — Sat, 13 Apr 2024 11:44:07 +0000

Coinbase is looking to elevate a key aspect of its legal dispute with the U.S. Securities and Exchange Commission (SEC) by seeking an appeal in federal court.This appeal focuses on whether certain digital asset transactions, specifically those not tied to obligations from the original issuer, should be classified as investment contracts falling under the SEC’s regulation.

The company’s move comes amidst a broader clash between the crypto industry and the SEC, with Coinbase aiming to address a crucial legal ambiguity. By filing for an interlocutory appeal, Coinbase aims to prompt the U.S. Court of Appeals for the Second Circuit to examine this specific legal question independently.

At the core of this dispute lies the application of the Howey test, a legal standard used by the SEC to determine whether certain transactions qualify as securities. Coinbase argues that the current application of this test to cryptocurrency assets lacks clarity, highlighting the complexity of the issue and the divergence in judicial outcomes.

While such appeals are often challenging, Coinbase’s action could potentially pave the way for a definitive ruling, possibly even reaching the U.S. Supreme Court. Clarifying whether digital asset transactions outside of issuer obligations fall within the SEC’s jurisdiction is crucial for the U.S. crypto sector.

In a recent ruling, Judge Katherine Polk Failla allowed most of the SEC’s case against Coinbase to proceed, underscoring the significance of this legal battle for the industry. If the appeal is accepted, it could influence the trajectory of the case while shedding light on the regulatory landscape for digital assets in the U.S.

Coinbase’s case represents a pivotal moment in the ongoing legal struggle between crypto firms and regulatory authorities. With past rulings showing mixed outcomes, the resolution of this case could have far-reaching implications for the industry’s future regulatory framework.

The post Coinbase Goes Court Against SEC appeared first on Coin Engineer.