The United States Securities and Exchange Commission (SEC) has filed a letter that responds to claims by crypto exchange Coinbase. The latter had indeed asserted that the stock market policeman has no jurisdiction to prosecute him. However, the SEC claims that Coinbase has acknowledged the likelihood that federal securities laws will apply to its operationsopenly informing its shareholders of the risk.
Was the exchange aware of a possible violation of federal law?
In a letter sent by the SEC to a district judge on July 7, it reads that Coinbase had knowledge of the likelihood that federal laws on securities would apply to its operations. Moreover, the crypto exchange had openly informed its shareholders of the possibility that assets traded on its platform are similar securities.
” Since becoming a public company, Coinbase has repeatedly informed its shareholders of the risk that crypto assets traded on its platform could be considered securities and therefore its conduct could violate federal securities laws. “, Can we read in the letter sent by the regulator.
The SEC goes on to claim that Coinbase is a “multi-billion dollar entity advised by sophisticated legal counsel” that “ deliberately ignores over 75 years of control law under Howey ” in order to ” Constructing your own test for what constitutes an investment contract “.
Coinbase’s defense strategy is collapsing?
As a reminder, SEC is suing Coinbase. The company tried to have the SEC declared incompetent. Indeed, Coinbase had on June 28 informed the court of its intention to file a motion for judgment. This occurs when a party believes that there is no real dispute over material facts in a case.
In the letter Coinbase, SEC Chairman Gary Gensler’s remarks to Congress when he allegedly said, ” There is no market regulator around these crypto exchanges “. Furthermore, he added: only Congress could confer the power to regulate crypto exchanges “. Coinbase is thus attempting to demonstrate that Gensler and the SEC have no standing to sue him.
The SEC has already sued several crypto companies and won their case very often. In general, business operations or its value are affected at least reduced. Perhaps the best thing for Coinbase to do would be to broker a deal.
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