The U.S. Securities and Exchange Commission (SEC) has scored a win in its lawsuit against crypto exchange Coinbase.
The SEC first sued Coinbase in June 2023 for allegedly violating securities laws, including selling unregistered securities and operating an unregistered exchange/broker agency.
Now, Judge Katherine Polk Failla has ruled that the SEC has made “adequate” allegations that Coinbase engaged in “the unregistered offer and sale of securities,” meaning that Coinbase’s motion to dismiss has been partially denied.
However, the court also agrees with Coinbase that the exchange is entitled to the dismissal of the claim that Coinbase acts as an “unregistered broker by making its Wallet application available to customers.”
Coinbase’s chief legal officer Paul Grewal addressed the ruling on social media platform X, saying that the exchange was prepared for the decision, and remained confident in its stance.
“Early motions like ours against a government agency are almost always denied. But clarity is the ultimate goal and today’s decision continues us on that path.
While we continue this process, and any necessary appeals, we encourage Congress to build on the momentum we saw last year to advance comprehensive digital assets legislation in the US. This is critical if we want innovation to remain in the US.
We also appreciate the Court’s understanding that technology innovations like Coinbase Wallet do not and cannot implicate US securities laws.
Looking ahead, we remain confident in our legal arguments, we look forward to proving we’re right, we are eager for the opportunity to take discovery from the SEC for the first time, and we appreciate the Court’s continued consideration of our case.”
Both Coinbase and the SEC have been directed to propose a case management plan to the court by April 19 so the case may proceed.
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